nce upon a time, when
the price of a country’s exports
crashed and its debts soared, a
team of earnest-looking suits from
the IMF would turn up with money
and an offer that the government
couldn’t refuse. The deal would
go something like this: cut the
government payroll, devalue the
currency, liberalise trade and sell
off a few state assets.
At the beginning of the year,
when Christine Lagarde, the stylish managing director of the IMF,
was asked by a journalist if she
was pressing President Muhammadu Buhari’s government to
devalue the naira, she demurred.
That is an outdated view of how
the fund operates, she insisted.
True enough, the days of IMF
and World Bank diktats are gone.
And they ended badly, after an
era of pseudo-reforms without
structural change. Harsh economic forces persist, and new
political systems – with competitive multiparty elections – are
desperately trying to adapt.
For the ruling parties in Ghana
and Zambia, both facing elections
this year, all the choices are hard.
As growth flags, prices and debts
are going up. And the politics is
getting nastier, with allegations of
skulduggery on all sides.
Governing parties fear the
‘Nigeria effect’. A year ago, Buhari
powered to victory on a campaign
of change as President Goodluck
Jonathan struggled with crashing oil prices and out-of-control
corruption. Technology – social
media and biometric checks on
voting – helped too.
Now Buhari also has to navigate the new politics. He faces
a high-stakes policy battle over
the exchange rate. Banks and
businesses want a massive

devaluation. Buhari insists that
that would be hyper-inflationary,
making life tougher for the poorest.
This time, the spectre haunting
the government is not a dawn
broadcast by putschists but
mounting popular dissatisfaction.
The new politics should have its
advantages. The big economic
decisions are meant to take account of popular sentiment. That
is at the heart of Nigeria’s policy
arguments today, but it points to
a bigger question across Africa.
Almost every ruling party relies
on farmers for election victory. Opposition parties rarely
make much headway
Governments
beyond their redoubts
in the towns and cities.
may court
Canny politicians in
businesses
Brazil and India have
and banks,
mobilised farmers’
unions to win power
but they
and boost production.
forget
Now it is in Africa’s
countryside where
farmers at
change could have
their peril
the greatest positive
effect. Farmers still
struggle to get finance, irrigation,
fertiliser and machinery. That’s
why Africa, despite having 60%
of the world’s uncultivated land,
spends $40bn per year in food
imports, according to the Alliance
for a Green Revolution in Africa.
Those countries doing best with
farming are Ethiopia and Rwanda,
where state-backed programmes
provide expertise and inputs. Both
governments argue that their
economic performance bolsters
their political legitimacy. Although
recent protests are showing the
limits of authoritarian developmentalism, there is still a big lesson for political activists: forget
the farmers at your peril. ●

• Nigeria The Buhari gamble
• South Africa Asleep at the wheel
• Tanzania 100 days of rectitude

N ° 7 7 • f e b r u a r y 2 0 16

w w w.t he af r i ca re po r t .co m

he annexation of Africa to a terror hub
[‘Islamic State/Africa: This grim utopia’,
TAR77 Feb 2016] offers a clear insight
into some of the elements responsible for and
COMPANIES
encouraging the radicalisation of the continent
How to thrive in 2016
by various terror groups.The solution to ending this
terror surge is for African leaders to get their acts
together – the time to keep playing ping-pong with
governance is over. For a continent that warehouses
70% of the under-30 age bracket, there is a huge
market for recruits. What African countries need to do is to create a sense
of belonging in the youth by ensuring they form an appreciable percentage
of any policy formation and government. African youths are angry, feel
neglected and are more open to radicalisation than those in the Middle East.
Adekoya Boladale Public affairs analyst and political commentator, via email
2016 EDITION

EXCLUSIVE RANKING

• Market share up for grabs in great shake-out
• Oil companies double down on costs
• Cash injection into telecoms infrastructure

differ across the continent, affecting
priorities. The one factor that cannot
be overlooked, however, is the
continuing importance across Africa
of the teacher. The real priority should
be teaching teachers digital literacy
and enabling them to access
information and content. Focusing
on teachers is likely to result in more
significant benefits in the longer term,
as well as much greater value
for money, than investing in projects
to provide children with expensive
and rapidly obsolete hardware.
Rebecca Stromeyer
Founder, eLearning Africa, via email

AFFORDABLE PHONES
IS WHAT MATTERS
UNIONS AND GOVERNMENT
MUST SHAPE UP
Can South Africa survive the
commodities downturn? [‘Mining:
End of the super-cycle’, TAR76 Dec/Jan
2016]. Only if it really wants to! For
nearly 150 years South Africa survived
cyclical commodity prices better than
any country in the world. Not only did
the country possess larger economic
deposits of more minerals than the
world’s other 200 countries, but SA’s
mining industry was experienced and
advanced enough to know how to mine
its minerals safely and economically.
Rising commodity prices deluded the
government and unions into believing
they knew much better how to

The use of smartphones is
increasingly becoming an integral
part of the life of the African
[‘Smartphones: Your guide to the new
low-cost models’, TAR75 Nov 2015].
In purchasing a phone, the African
Peter Major consumer generally considers: retail
Mining consultant, via email price, brand, camera quality,
functionality, aesthetics, physical size,
internal memory capacity, durability
and user experience. While it remains
INVEST IN THE TEACHERS
that some consumers would go in for
NOT THE TECH
the brand name before anything else,
The article ‘Joining the digital race’
the consumer market for affordable
[TAR75 Nov 2015] asked: ‘What comes
high-end feature phones is gradually
first for eLearning in Africa? The
becoming the primary deciding factor
software or the hardware? Local
for making purchases.
content or accessible and affordable
Kwame Adu-Appeah
internet?’ Bandwidth and connectivity
via email

maintain a sustainable mining
industry. Now SA’s mining industry
is in a shambles and losing money
and manpower daily. Will government
and the unions act to save the industry
before it’s too late? Only 2016 will tell.

THE QUESTION
To respond to this month’s Question, visit www.theafricareport.com. You can also find The Africa Report on Facebook
and on Twitter @theafricareport. Comments, suggestions and queries can also be sent to: The Editor, The Africa Report,
57bis Rue d’Auteuil, Paris 75016, France or editorial@theafricareport.com

Popular African clergymen have been listed on Forbes’ richest list and are
known for their lavish lifestyles and private jets. Despite raking in an estimated
$18.4bn in 2014, the religious organisations they run are tax exempt

There are many advantages to churches paying
tax to the government. These can be grouped into
two categories: helping the government fund
its obligations, and compliance with the laws of the land. All
governments have obligations to their citizens. These include:
provision of social services to the nation such as health facilities,
education, security, food, shelter and energy; infrastructure such
as road development and maintenance, building and maintaining
energy infrastructure; and thirdly the government has to pay its
employees. Most of government employees (teachers, police, military
etc.) are in social services where there is no generation of revenue
but rather provision of a service. The government also has an
international duty to help solve challenges happening in the world
through bodies such as the United Nations and the World Food
Organisation. All the above-mentioned obligations need funding
and one way by which the government can raise the required funds
is through taxes. Complying with the laws of the country has
its advantages which include being a responsible and obedient
organisation according to Romans 13:1-7. Above all, taxes belong
to the government therefore we must give to Caesar what is Caesar’s
and to God the things that are God’s (Luke 20:19-26). ●

No
MSGR.
GABRIEL
OSU
Director
of Social
Communications,
Catholic
Archdiocese
of Lagos

Churches should not be made to pay tax. Religion
is a very sensitive issue in Africa. Taxing the various
religious institutions may degenerate into further
division, not only among the various sects but also against the state.
Albeit taxation is very essential for enhanced development, African
countries are still bedevilled by so much poverty and poor leadership
that they lack sound taxation policies. A majority of the populace
find solace in religious bodies. The bulk of its citizens are ordinarily
not responsive to their civic responsibilities, owing to distrust, poverty,
and/or lack of proper enlightenment. Also, non-accountability and
transparency, coupled with political and economic instability have
over the years pitched a good number of the citizens against their
leaders. Thus, it seems there is an aversion by many to taxes, believing
that the bulk of revenue so generated often ends up in private
accounts with no developmental project to show for it. I believe
strongly that compelling religious bodies to pay taxes would spark
off chains of negative consequences. They assist in providing social
amenities that ordinarily should be the responsibility of government.
They are engaged in providing quality education, health facilities
and even empowering the widows and less privileged. Imposing
additional taxes on them would be tantamount to an overkill. ●

YOUR VIEWS:

Yes, absolutely. They
are thinly disguised
corporations, fleecing a
gullible populace for private
gain. Yes, yes, yes!
Paul Boakye
They must help the
needy and that’s
why they are exempt from
paying taxes.
Manyok Giet
Greed is considered
one of the deadly
sins and if these people
really want to demonstrate
real Christian values
they should be using the
church’s money to invest
and rebuild communities.
That way their charity
status would be legitimate.
Kyle Miller
YES!!! Churches
are non-profit
organisations which use
public funds and, as such,
they should make known
how much they collect,
what they do with those
funds, and pay taxes.
KB Kafang
These pastors are
businessmen. They
should pay taxes, after all
it’s mentioned in the Bible.
Samuel Bantar
Yes, they should
start paying taxes.
They live lavish lifestyles
at the expense of poor
congregations.
Leonard Chishimba
All religious entities
should pay taxes!
Not just in Africa, but all
over the world!!!
Africangeneration

THE AFRICA REPORT

•

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SIGNPOSTS

BURUNDI A man arrested after a grenade attack

in Bujumbura, where violence continues in response
to President Nkurunziza’s plan to run for a third term.

FINANCE
AFRICA’S IPOs IN 2015
2%

1%

W

hile strongmen are
steamrollering over
constitutions to cling on to
power, South Africa’s institutions
showed in February that they will not
be cowed by President Jacob Zuma. The
long scandal about improper spending
on so-called security upgrades to his
Nkandla homestead – which included
a pool and chicken run – reached Chief
Justice Mogoeng Mogoeng at the
Constitutional Court in February after
a complaint from the Democratic
Alliance (DA) and Economic Freedom
Fighters (EFF) parties. Zuma has
conceded that he would pay back some
of the money spent on the upgrades.
An investigation by Public Protector Thuli
Madonsela found in 2014 that Zuma

17%

14%

16%
Financials
Oil & gas
Consumer goods
Industrials

46%

4%
Healthcare
Consumer services
Basic materials
Telecommunications

In conjunction with
GeoPoll, The Africa
Report asked 100
Nigerians across the country
the question:
Should Africans be able
to travel visa-free
throughout the continent?

7%

55%

38%

GeoPoll is the world’s largest mobile
surveying platform and sample
provider in emerging markets,
enabling companies and organisations
to gather quick, accurate and in-depth
insights. To learn more or to sign
up to receive surveys visit Research.
GeoPoll.com

TREVOR KUNENE/DAILY SUN/GALLO IMAGES/GETTY IMAGES

?

Yes
No
Don’t
know

World Boxing Council bantamweight champion
in a surprise victory over Mexican Yazmin Rivas.

SOUTH AFRICA President Jacob
Zuma gave his State of the Nation address
to a hostile parliament on 11 February.

Payback time for Zuma

<1%

Initial
public
offerings
by value
in 2015

ZAMBIA Catherine Phiri became the first African

SOUTH AFRICA

SOURCE: DEALOGIC

10

had “unduly benefited” from the public
spending on the Nkandla property
and that he should pay the money back.
The battle is not yet over, and Zuma
proposed a settlement to the Nkandla
case on 6 February, saying that the
auditor general and finance ministry
– two institutions run by Zuma
appointees – should determine how
much of the $23m should be repaid.
The DA and the EFF are promising
to keep up the pressure as the court
contemplates its ruling, but they
are saving the celebrations until the
money is back in the treasury. Activists
and campaigners from across the
continent are looking to the South
African example for ways that they can
help to foster accountability at home.

Chief Justice
Mogoeng is
hearing the legal
wrangle in court

THE AFRICA REPORT

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CENTRAL AFRICAN REPUBLIC

UN peacekeepers policed polling stations on
14 February for the country’s presidential elections.

MOROCCO The world’s largest solar

power plant, in Ouarzazate, went live on
4 February. It stores energy as molten salt.

ITALY Asylum seekers from Mali and Gambia took to
the catwalk as part of the ‘Generation Africa’ event during
the ITC Ethical Fashion Initiative in Florence on 14 January.

“Islamists don’t like life. For them,
it’s
it s a waste of time before eternity ”

THE AFRICA REPORT

Algerian author Kamel Daoud writing in French
daily newspaper Le Monde on interpretations
of Islam. “Life is a product of disobedience and this
disobedience the product of a woman,” he added.

•

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CHINA
DRAGON SLIPS

SOURCE: CHINA CUSTOMS

Aggressive selling

Chinese imports of African goods
dropped by 38% in 2015 compared
to 2014 as the East Asian giant’s
expansion slowed. As China moves
away from its focus on producing
cheap exports, demand for
raw material exports has softened,
slashing African revenue.
This followed news in November
of a 40% slump in Chinese
direct investment in the continent
in the first six months of 2015.
Meanwhile, African imports from
China rose year on year by 4%,
hitting ¥ 670bn ($102.8bn) in 2015.

TRANSPORT
SUNCHASER
Ugandan firm Kiira Motors has
announced the construction a solar
powered bus – one of the first such
models in East Africa. The prototype
35-seater Kayoola bus
cost USh500m ($147,000)
to build and can run
for around 80km on
power stored in its twin
rechargable batteries.

11

BRIEFING

INTERNATIONAL
1

4
5

1
3

2

IRAN

$100bn

The initial amount that European and United
States authorities released from frozen Iranian
funds in January. Tehran announced plans to
buy 114 Airbus planes at a cost of about $10bn
as part of its initial shopping spree.

4

UNITED KINGDOM

One foot in, one metre out

LIANNE MILTON/PANOS-REA

Britain could hold its in-or-out referendum
on its European Union (EU) membership
as soon as June of this year if a crucial
summit in mid-February produces a series
of reforms acceptable to the Conservative
government of Prime Minister David
Cameron. Hardline Conservatives
say that the framework for negotiations
– which would mainly allow Britain to curb
welfare payments and give parliament
more power to stymie EU regulations –
does not go far enough in protecting
the country’s interests.

2

BRAZIL

From Ebola to Zika

5

While Sierra Leone was discharging its last Ebola patient, another rapidly
spreading virus had taken its place in global headlines: Zika. The World
Health Organisation declared the Zika virus – which is not fatal, is transmitted by mosquitoes and causes a fever and symptoms similar to dengue – an
international emergency in February. Health authorities in Latin America are
worried about the most recent outbreak, which analysts suggest could lead
to three million new infections this year, because there are concerns that the
virus can cause neurological problems for children born to infected mothers.
The US legislature is debating a bill to devote $1.8bn to the campaign to
find a vaccine for the disease. But finding a usable vaccine could take years or
more because there has previously been little research into the virus, which has
been found in the saliva of infected people long after they no longer present
symptoms. The global response to Zika will be a crucial test of whether world
leaders have learned any lessons from West Africa’s experiences with Ebola.
3

have been
undermined
by the continuous
lack of sufficient
humanitarian
access and by
a sudden increase
of aerial bombing ”

MYANMAR

Developing democracy
Change is coming in fits and starts in military-run Myanmar. After Nobel
Prize-winner Aung San Suu Kyi and the National League for Democracy
(NLD) won a huge victory in November’s polls, in February she and
her parliamentarians finally took office in the legislature, in which the
constitution guarantees 25% representation for the military. The NLD’s
next battle is for the post of the national president. Myanmar’s president
will be chosen in March or April, and Suu Kyi is negotiating with the junta
to remove a constitutional clause that was created to prohibit her from
running because her late husband was a foreigner.

SYRIA

“The talks

GILLES ROLLE/REA

12

Unitted Nations secretary
gen
neral Ban Ki-moon told
a do
onor conference in February
that peace negotiations were
stalling in Syria.
THE AFRICA REPORT

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PEOPLE

SPOTLIGHT

Ibrahim al-Jathran
The militia leader is struggling to hold on
to control of Libya’s oil terminals while fighting
Islamic State and organising illicit oil sales
LIBYA GOT A NEW unity government
in February, but the struggle for control
of the country is being fought along the
coastline extending from Islamic State’s
(IS) headquarters in the late Muammar
Gaddafi’s home town of Sirte eastwards
to Benghazi, capital of the province
of Cyrenaica. This area is home to Libya’s
most important oil terminals and its
most prolific hydrocarbons resources.
It is also home to the mercenary militia
leader Ibrahim al-Jathran, who has
played an influential role in bringing
Libya to its current crisis.

Jathran is the 36-year-old
commander of the central region’s
Petroleum Facilities Guard (PFG)
– which has control of the Sidra,
Ras Lanuf and Zueitina oil terminals.
He is on the frontline against IS, which
has launched a series of destructive
onslaughts on these facilities.
Few observers argue that his forces
are able to withstand repeated IS
attacks. The international military
intervention proposed by Italy, France
and the United States is needed partly
to compensate for Jathran’s weakness.

If bombing raids are successful,
the question will be whether to leave
Jathran – who is said to be backed
by the powerful Magharba tribe –
in control or if not, how to expel him.
Jathran is notorious not only for
using control of the terminals to further
his political aims but also for leveraging
funds. His allegiances are also deeply
questionable. While he has declared
his loyalty to the Tobruk-based House
of Representatives, he is a self-declared
federalist, agitating for greater
autonomy for Cyrenaica.
He also has a jihadist history of
his own. He is believed to have been
a junior associate of the Libyan Islamic
Fighting Group, the armed opposition
group crushed by Gaddafi in the 1990s.
On 16 February 2011 – the day before
the anti-Gaddafi revolution formally
started – he was released from a jail
in Benghazi. He then became the field
commander of the Hamza Battalion
A CAREER
IN COMBAT
2011 Led a
battalion of the
Omar al-Mukhtar
Brigade during
the campaign
against Gaddafi
2013 Became
the head of the
Political Bureau
of Cyrenaica
2014 Shut down
eastern Libya’s
oil export
terminals to
extract money
from the NOC

JOAN TILOUINE FOR JA

14

2014 Sold oil
to the North
Korean-flagged
Morning Glory

“There is not a single African
country that can guarantee the
security of its citizens.”

“They have the right to
defend their interests, just
like everybody else does.”

Senegal’s former foreign minister Cheikh Tidiane Gadio laments the state
of African security speaking after the January attack in Ouagadougou.

Djibouti’s President Ismaïl Omar Guelleh supports China’s
building of a naval base at the entrance to the Red Sea.

THE AFRICA REPORT

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Good times

DONALD KABERUKA
In February, African Union
chair Nkosazana Dlamini-Zuma
named the economist and
former African Development
Bank president as the
high representative for the
AU’s new peace fund.

The Tanzanian striker became
the first East African to be
crowned by the CAF as African
Inter-Club Player of the Year –
Based in Africa. He plays for the
Democratic Republic of
Congo side TP Mazembe.

N ° 78

•

M A R C H 2 016

The Kenyan athlete won the
Mumbai Marathon in January
with a time of 2:08:35. The time
was a new record for the course,
a full second faster than the
previous top time set by Ugandan
Jackson Kiprop in 2013.

The Ivorian former president is
standing trial at the International
Criminal Court, accused of
war crimes and crimes against
humanity related to the outbreak
of violence that followed
his 2010 election defeat.

MBWANA ALLY SAMATTA

“When it comes to troops,
our position has not
changed. It is a no-go ...”
THE AFRICA REPORT

LAURENT GBAGBO

ALL RIGHT RESERVED; RAJANISH KAKADE/AP/SIPA

of the Omar al-Mukhtar Brigade
and was active around his home town
of Ajdabiya during 2011.
After the revolution, he became
the leader of the PFG. In August 2013,
he placed himself at the head of
a campaign for the autonomy of
Cyrenaica and the creation of a federal
system. Describing himself as the
chairman of the Political Bureau
of Cyrenaica, he declared that the PFG
would blockade the oil export terminals
because the authorities in Tripoli
were stealing revenue generated from
oil produced in the east.
This was the first large-scale attempt
by a faction to use resources to extract
political benefits. Combined with
blockades at other facilities, it has cost
Libya approximately $68bn in foregone
revenue, according to figures released
by Tripoli-based National Oil Corporation
(NOC) chairman Mustafa Sanalla.
The government’s initial attempts
to buy Jathran off failed. He derisively
dismissed an offer of about $30m
in the first month of the blockade.
A year later, in July 2014, he accepted
approximately $200m, but the terminals
only operated for a few months before
attacks by militias from Misrata and
then IS shut them again.
Meanwhile, Jathran’s associates
in eastern Libya were attempting
to secure a much larger financial prize
by establishing autonomous oil sales.
The most notable of several failed
attempts was that of the Morning Glory,
a tanker that succeeded in lifting
a cargo from Sidra in March 2014
but was apprehended by United States
Navy Seals offshore Cyprus.
The NOC is leading a vociferous
anti-Jathran campaign, blaming him
for much of the destruction of the
oil industry and claiming that people
close to Jathran are continuing to
John Hamilton
negotiate oil sales. ●

The army chief, who has been
a vocal critic of Uganda’s
President Yoweri Museveni,
was detained and charged
in a military court in late January
with being absent without leave
and being involved in politics.

JEAN PING
In late January the former
AU chairman won an umbrella
group’s nomination to run against
President Ali Bongo Ondimba
in Gabon’s August election,
but his nomination triggered
a split in the opposition alliance.

Bad times

15

16

BRIEFING

OPINION

Chester Missing
Puppet political analyst

They have Trump, we got Rhodes

H

ollywood actor Samuel L. Jackson has
declared that if racist real estate mogul
Donald Trump wins the United States
presidency he’s moving to South Africa.
But with the way our exchange rate
is going, he could probably just buy us. Of late,
our economy has had more ups and downs than
Sarah Palin’s speeches, and our currency has been
slammed along with the rest of the developing
world’s by China’s troubles.
Recently, the International Monetary Fund gave a
shockingly low economic outlook for South Africa.
With just 0.7% predicted economic growth, a South
African buying a beer in London has to mortgage
their farm – that’s assuming the apartheid state
didn’t already steal it.
On the bright side, if you are a political puppet like
myself then South Africa is the place for you.
Opportunities are endless. Whether it’s
running our national broadcaster
or being minister of finance, it’s
Sesame Street all the way. Our
national airline has been bailed
outmoretimesthanVictoriaBeckham’ssingingcareer,andourpresident has the spending habits of a
Kardashian in a shoe store.

than him or that are more complex than merely
his inadequacies. How do we reconcile extreme
inequality built off a system of racial supremacy?
How do political leaders make tough choices that
threaten their own political support? How do we
create an effective enough power grid without billions being lost to corruption? And how do we get
Samuel L. Jackson not to buy us?
During 2015, the tone of the political conversation changed with a small incident involving throwing poo at a statue of Rhodes – or, if you are fan of
African wildlife, ‘the other Cecil’.
Students at the University of Cape Town (UCT)
brilliantly raised the issue of lack of transformation
on the campus by demanding the now notorious
statue be removed. Naysayers argued that Cecil
John Rhodes donated the land UCT is on,
so leave him be. But as the guy stole 1m
square miles of Africa, giving him a statue

In 2015, our president, Jacob
Zuma, managed to squeeze his
way out of having to pay back
any of the R246m ($15m) the
government spent accidentally
on purpose on his private home
in rural KwaZulu-Natal, purportedly
on security upgrades. The security upgrades
included a chicken run and swimming pool. Apparently, the chickens know kung fu. We are told
that the swimming pool is a fire safety measure
because the fire services in the Nkandla area are
below standard. Ironically, Zuma’s own party, the
ruling African National Congress (ANC), also happens to run the Nkandla municipality. So this is like
the owner of a Burger King ordering McDonald’s
because his own food sucks. Our national leader is
kind of compromised.
Part of the problem is that our political pundits
often unfairly blame him for dynamics that are bigger
THE AFRICA REPORT

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BRIEFING

is like a car-hijacker stealing your car and then wanting a thank you letter for dropping you off at work.
The poo-throwing opened a crack, which started
an avalanche called #FeesMustFall – the campaign
for an end to increases in university fees, and even
to the fees themselves. It involved the police lobbing
tear gas at students, who were dangerously armed
with textbooks and feminism. You don’t want to get
feminism in your eye, I can tell you.
The political significance of this is that the distance between the ruling party’s promises and the
desires of young South Africans for change have
never been more apparent. We even saw higher
education minister Blade Nzimande on TV saying
“students must fall” jokingly on camera. Laughing
at poor people is never a good move, especially for
the head of the South African Communist Party – it’s
like Ted Cruz being caught in an abortion clinic.
White South Africans, like Pop Tarts in an Oreo
box, got excited that the Oreos were finally seeing the
light. But in truth, those that saw the #FeesMustFall
movement as anti-ANC hadn’t gotten it. The decolonisation programme was more firmly on the national agenda than ever before. The question of who
teaches what knowledge in what institution and to
whom was in question. In South Africa, only 4% of
full professors in higher education are black. Yes, we
are an African country. It’s like the Oscars out here.
The students were making the central point clear:
economic change has not happened. Educational accessanddecolonisinglearningaretheirpointsofattack.
Then on 4 December 2015 Standard and Poor’s, the
ironically named ratings agency, downgraded us from
stable to negative. Zuma responded with surprising
velocity and replaced respected and competent

finance minister Nhlanhla Nene with completely
unknown political backbencher Des van Rooyen.
Puppets were back in power! It had all the makings of a Kermit the Frog-Jim Henson relationship.
A no-brand-name politician gets a shot at one of
the most important cabinet posts just out of the
blue? If it were any more dodgy, FIFA would have
made it a marketing plan.
Word on the street was that Nene hadn’t got with
the marionette programme and was blocking deals
conducted by people close to Zuma. According to
South African law, the president can appoint ministers as he chooses. So, while bringing in Elmo the
Economist was his legal prerogative, we still all went
nuts. White people filled in Australian visa applications and tried to write off apartheid and global

Zuma and Van Rooyen had the makings
of a Kermit-Jim Henson relationship
warming as Zuma’s fault: “But laaaik Zuma hey…”.
Comedians stopped writing jokes and just read
the news. Comrades close to the President in the
ANC who were mad enough to agree to interviews
stared at journalists like a Trump voter in a mosque.
The presidency tried some last-minute spin about
the fired Nene having an emergency, surprise placement in the BRICS Bank – because you know how
politicians and plumbers work on the same lastminute call-out system. None of it stuck. Zuma was
forced to bring back a previous finance minister,
Pravin Gordhan, who has the unique position of
being politically protected by Zuma’s own folly. I
would sell T-shirts saying: “You can’t replace the
replacement of a replacement without asking for
your own replacement,” but not even our buffet-savvy
politicians are wide enough to wear one.
This year will bring municipal elections, with serious threats in the major metropoles for the ANC.
The unemployment rate is sitting at around 25%,
although it’s said to be far higher amongst finance
ministers. With our rand too low to benefit from the
oil price and a daily slew of racists destroying their
real-life careers on digital-life social media, our national grumpiness is in no danger of slowing down.
But before you think we are a sunken
ship, don’t forget: our stock exchange
is rated number one in competitiveness internationally; seven of
the top 10 universities in Africa
are in South Africa; we manage
to give out 15m social grants to
old people and children each
month; and, finally, we actually
got gay marriage before the US,
gotablackpresidentbeforetheUS
and even got Trevor Noah before
the US. What did they get before us?
Ebola and Donald Trump. You’re
welcome, Samuel L. Jackson. ●
As told to Conrad Koch

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17

BRIEFING

CALENDAR

CARDS & PAYMENTS
AFRICA
1-2 March
JOHANNESBURG |
SOUTH AFRICA
Trade show co-located with
the Cash Handling Show,
e-Commerce Show, Future
Bank Africa and Retail World
Africa for those who want
to cover all their bases.
terrapinn.com

CIBEX EAST AFRICA
1-3 March
NAIROBI | KENYA
All about East Africa’s
construction, infrastructure
and energy potential.
cibexeastafrica.com

Top African business and political leaders will converge at the Sofitel Abidjan Hotel
Ivoire for the fourth edition of the Africa CEO Forum, which is taking place on the
African continent for the first time. Presidents Alassane Ouattara of Côte d’Ivoire and
Uhuru Kenyatta of Kenya will join more than 800 participants, including some 500 chief
executives who are expected to attend the two-day conference. Subjects to be debated
include business opportunities in the new energy landscape, using public-private
partnerships to tackle social challenges across the continent and bridging the gap
between French-speaking and English-speaking Africa. Companies and CEOs who
have played an exceptional role in Africa’s growth story will be presented with awards
at a gala dinner on 21 March. theafricaceoforum.com

NIGERIA SUMMIT
7-8 March
LAGOS | NIGERIA
What progress has the
Buhari government made
in increasing Nigeria’s
attractiveness to investors?
economist.com/events

ABIDJAN | CÔTE D’IVOIRE

ICC WORLD
TWENTY20
8 March – 3 April
INDIA
The Zimbabwean women’s
team and South African and
Zimbabwean men’s teams
will represent the continent in
Twenty20 cricket, a short
form of the game.
icc-cricket.com/world-t20

WCA EXECUTIVE
INVESTMENT
SUMMIT
14-16 March
ADDIS ABABA | ETHIOPIA

The Wharton Club of Africa’s
CEO gathering.
wcaexecsummit2016.com
M

POWER &
ELECTRICITY
WORLD AFRICA
15-16 March

REP. OF CONGO
PRESIDENTIAL
ELECTIONS
20 March
CAPE TOWN
INTERNATIONAL
JAZZ FESTIVAL
1-2 April

JOHANNESBURG |
SOUTH AFRICA
With the Solar Show
running alongside.
terrapinn.com

CAPE VI AFRICAN
PETROLEUM
CONGRESS
15-17 March

CAPE TOWN |
SOUTH AFRICA
Artists include Grammynominated songwriter Angie
Stone, jazz flautist and
composer Eddie Parker
and the South African bassist
and composer Benjamin
Jephta with his quintet.
capetownjazzfest.com

ABUJA | NIGERIA
This 6th edition is
on “Positioning African
Petroleum for Global
Development
and Value Addition”.
cape-africa.com
THE AFRICA REPORT

•

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21-22 March 2016, Abidjan

4TH EDITION

THE FOREMOST INTERNATIONAL MEETING
FOR AFRICAN CEOS, BANKERS AND INVESTORS
2016 will mark the fourth edition of the AFRICA CEO FORUM.
Since its inception in 2012, the AFRICA CEO FORUM
has established itself as the foremost event devoted
to promoting the African private sector.
Each year, the event brings together more than 800 worldclass CEOs, bankers and investors, cementing its reputation
as a must-attend event for top African business leaders.
A unique platform for thought-provoking discussions,
the AFRICA CEO FORUM is an excellent opportunity for
you to develop your business, shape your strategy
and enhance your companyâ&#x20AC;&#x2122;s competitiveness.
theafricaceoforum.com
Twitter: @africaceoforum - #ACF2016
CO-HOST

DIAMOND

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NETWORK
with an unparalleled
roster of top African
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MEET
the most influential
investors on the
continent

CHALLENGE
your knowledge on
the latest business
practices in your
industry
PARTNERS

Ivory Jet services

AWARDS
INSTITUTIONAL PARTNERS

KNOWLEDGE PARTNERS

PLATINUM
OFFICIAL CARRIER

MEDIA PARTNERS

20

FRONTLINE

LAGOS

Maximum
City
Though it caters to the
powerful and rich, Lagos
will rise faster if it takes
everyone along for the
ride. Will new governor
Ambode nudge the city
down the right track?

By Leonard Lawal and
Eromo Egbejule in Lagos
and Nicholas Norbrook

W

elcome to Lagos, the
city that chops superlatives for breakfast. The biggest and
fastest-growing city
in Africa’s largest economy, with a new
arrival every minute according to the UN.
The best estimates of today’s population

in Lagos State suggest it has more than
20 million people. The UN predicts that
Lagos will be the world’s third-largest city
by 2025. The Global Cities Institute predicts a population of 77 million by 2100.
Nigeria’s epicentre of power and
money is a terrain ripe for all types of
fantasy,demographicorotherwise.Some
see in Lagos slick playboys and ‘subsidy
billionaires’ with private jets and yachts.
Others see dystopian visions of environmental apartheid, with the 1% pulling
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up the drawbridge to offshore housing
developments such as Eko Atlantic City
while the majority of Lagosians languish
outside in crime-infested suburbs.
For Lagos to live up to its huge
potential, it will need to foster its social
dynamism and improve the lot of the
99% while encouraging entrepreneurs,
businesses and traders to invest. The
Africa Report offers you a guide to the
changing city through the officials and
businessmen shaping its development,
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the architects and activists worried
about infrastructure, and members of
gangs going about their daily business
on Lagos’s streets.
BETTER MUST COME

Lagosians who remember the city in the
difficult times of the 1990s and earlier
may argue that the improvements are
already happening. The reigns of governor Bola Ahmed Tinubu (1999-2007)
and governor Babatunde Raji Fashola

(2007-2015) have transformed the city.
Roads were rebuilt and cleared, markets
moved. Lagos is better lit, better run,
cleaner, greener and safer.
To do it, the tax base has been overhauled. Tinubu and his successor raised
monthly revenue levels from less than
$4m in 1999 to more than $100m. This
is due to an arrangement whereby a
company with links to Tinubu collects
tax on behalf of the government, gaining
commissions in a system that former US

GEORGE OSODI/BLOOMBERG VIA GETTY IMAGES

Lekki has risen up from the swamps in the past 10 years, perhaps the world’s fastest-growing urban corridor

EKO ATLANTIC

22

ambassador to Nigeria John Campbell
says resembles “tax farming in the New
Testament or under Louis XIV”.
Not everyone agrees things have got
better. Femi, who works at Murtala
Muhammed International Airport and
lives in Oshodi – regarded as perhaps
the most dangerous place in Lagos – says
improvements in the area were beautification at best. “Fashola only worked on
the 10-lane highway that everyone can
see. The inside parts are still as they were,
and the crime rates are still high,” he says.
MEGACITY REALITY CHECK

Imagine hanging, drone-like, a kilometre above Singapore or Seattle, looking down at the cars moving. Speed up
the image so that each 24-hour cycle
lasts but a few moments. You will see
commuters inhaled and exhaled along
well-integrated rail links and highways,
in and out of the city. Cut to Lagos. It is
choked in traffic. Tempers flare as countless thousands try to push their vehicles
onto Lagos Island and Victoria Island.
These twin traffic pinch points – accessiblebyjustthreegroaningbridges–house
key offices, apartments and, importantly,
employment. This pressure keeps Lagos
at boiling point: pushing up property
prices and driving the city out onto the
sea and neighbouring states.
But who runs Lagos, and who benefits
from the pressure? “We are all winners,”

Rem Koolhaas, the avant-garde Dutch
architect, argues that Lagos is pioneering
anewformoforganisationwithitsnetwork
of functioning ad hoc structures connecting both official political and commercial
groupsandtheinformaleconomy. Others are sceptical,
About 15% of the population
such as Nigerian architect
lives off the power or sanitation
Giles Omezi. “The Koolhaas
approach–celebratingLagos
grid, paying $10 a month rent
theMegacity–needsareality
said newly elected governor Akinwunmi
check.We’reheadingfor25millionpeople
[…]. With the current constraints we’d be
Ambode at his inauguration in May 2015.
sittingonatimebomb,especiallywithout
“We must recognise our strength in dimass transit,” he argues. Omezi has been
versity – a common national identity
working on several urban planning prowhere everybody counts.”
jects in Lagos over the past 15 years and
This message has yet to be heard at
the bottom. About 15% of the population
says “transport is the key. Without fixing
lives off the sanitation, power and roads
that, the city is jammed. Everything else
grids. These Lagosians live in informal
– electricity, water and sanitation – can
settlements and slums, paying rents of
be improvised off the grid to an extent.”

around N2,000 ($10) per month to stay
in rooms where six to eight people live.
They will not be accessing the much
trumpeted Nigerian housing mortgage
scheme, where the smallest monthly
mortgage repayment is around N40,000.
“I normally start out around dawn,”
says Abiodun Martins, who works at a
hotel on Victoria Island and commutes
in from the mainland. “I normally get
home around 10pm, 11pm. Traffic! I see
the kids on the weekend.”
Great countries need great cities, and
great cities historically provide quality
services. Cities that manage to insulate
the poor from larcenous landlords and
exhausting commutes create huge upswellings of talent, creativity and wealth.
There are worries that progress in
Lagos is slowing, even reversing. Since
the elections in April 2015, there has been
anecdotal evidence of the resurgence of
daylight robberies and people being attacked while stuck in traffic, something
the Lagos government denies. Police
commissioner Fatai Owoseni did report
that there were 220 murders in the city in
2015. Residents point an accusing finger
at ‘area boys’ – young criminals.
Often seen as part of the problem, the
33,000-strong police force in the state,
which is under the control of the federal government, is struggling against
all manner of lawbreakers. Deputy
superintendent Joe Offor, the state police spokesman, says: “We are working
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L AGOS: MA XIMUM CIT Y | FRONTLINE

23

Future transportation networks in Lagos

Red Line (Marina to Agbado)
Blue Line (Marina to Ojo)
Green Line (Marina to Lekki Airport)
Yellow Line (Redeem to Iddo)
Brown line (Marina to Mile 12)
Orange Line (Marina to Redeem)

Mangrove swamp
Heavy forest
Lagos-Ogun built-up area
Otta

To Ibadan

Proposed Lagos
urban rail system

Rail terminus
Monorail
High-speed rail

Redeem

Agbado

Iju
Agege
Murtala Muhammed
Int Airport (MMIA)

Mile 12

Ikeja

Shogunle
Mafoluku

Above: Reclaiming
land from the sea, the
Chagoury brothers’
Eko Atlantic City
development will house
250,000 Lagosians in a
high-end financial and
commercial hub, with
its own water, power
and security. The
first skyscrapers are
now under construction

Oshodi
Ajao Estate
Jibowu

Lagoon

Yaba
Okokomaiko
Iganmu
Mile 2
Lasu

Trade Fair

National
Theatre

Ebute Metta Junction
Iddo

Festac

Marina

To Lekki
Airport

Apapa

on reducing the high crime rate […].
I can’t tell you the new strategies because then you’ll write it and the robbers
will be forewarned.” As in other states,
the police in Lagos are poorly paid and
under-equipped, which saps morale.
LIVING IN PEACE, LIVING IN FEAR

The National Union of Road Transport
Workers (NURTW) is meant to lend the
police a hand by keeping bus and taxi
parks smooth and operational. However, the ‘National’, as it is known, has
extended its operations and, once in a
while, its members violently tangle with
area boys and ‘cult members’ – supporters of secret societies who often vie for
supremacy on university campuses.
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Some youth gangs have overlapping
memberships. Oshodi resident Femi
offers an explanation: “The politicians
take popular area boys who are their
supporters and bring them to be leaders
of the NURTW. As those ones blend into
the system, they carry their guys along.”
NURTW groups are scattered across
Nigeria, but their powers are strongest
in the south-west, where the aspiration
to be an area boy or a ‘National’ member
is commonplace these days for children
in the slums. In a country where more
than half of the population lacks decent
jobs, ‘National’ members form a pool of
willing mercenaries, recruited by politicians during elections and afterwards to
‘keep the peace’ in their ‘hood’.

Gangs clash intermittently with rivals
and police over territory. Hotspots for
these conflicts are largely north of the
central business district on Lagos Island,
in the Bariga, Fadeyi, Oshodi, Mushin,
Shomolu, Ajegunle, Onipanu, and Ebute
Metta areas of the city. According to a
statement from the Lagos State Police
Command, cult clashes in the state killed
80 people between January and June
2015. Whenever they fight, business
grinds to a halt as shop owners close
while the gangsters orchestrate mayhem.
IntheusuallybusyIdumotaareawhere
some of the largest movie and music distributors have their head offices, NURTW
memberssnuffoutthebusinessofpirates.
Rasaki, one of those who prowl this ● ● ●

SOURCE: LAGOS METROPOLITAN AREA TRANSPORT AUTHORITY

Mushin

24

FRONTLINE | L AGOS: MA XIMUM CIT Y

GOD, POWER, MONEY AND POLITICS IN LAGOS
GOVERNMENT
LEADERS
MAJOR LANDOWNING FAMILIES

Oloto
Lagos Mainland

Ikate
Eti Osa

Coker

Ojora

Surulere, Orile

(Oba Fatai Aremu Aromire)
Apapa

Elegushi
Eti Osa

Relationship dynamics
Influence

Bola Ahmed Tinubu
The top political leader in the South-West,
Tinubu is at the centre of the Lagos web
of influence and money. By becoming an ally
of Buhari, he helped win the 2015 election.

Oniru
Eti Osa

Babatunde Fashola

Bill Clinton

A Tinubu protegé, Fashola runs
a super-ministry in Abuja –
a move some believe is meant
to drive a wedge between the pair.

The Chagoury brothers contributed
$5m to the Clinton Foundation
and brought the former US president
to launch Eko Atlantic City.

Money
Conflict

Hakeem Muri
Okunola
Prince
rince Oniru
Onir
Commissioner for housing and
then waterfront infrastructure
development, Oniru has backed
the Eko Atlantic project, as well
as the Jim Ovia-built Civic Centre.

RELIGIOUS
LEADERS

TB Joshua
Tunde Bakare

Close to Tinubu, Okunola
lost a key role in Lagos
government when
Ambode came to power.
He moved from the
housing bureau to the
ministry of youth.

Chief Oghene
Egboh
One of three Igbo candidates
to win seats in the House
of Representatives last year,
Egboh runs the heavily Igbo
Amuwo-Odofin Local
Government Area.

Governor
Akinwunmi Ambode
The new governor was supported
by key Tinubu allies to win
the post but is starting to prove
he is his own man. He is racing
to create transport networks.

Femi Hamzat
Hamzat was the Lagos State
commissioner for works and
infrastructure under former governor
Fashola. He is now close to Tinubu.

Jimi Agbaje
Enoch
noch Adeboye
Adebo
Head of the Redeemed Christian Church
of God, he holds mega-worship shows
in his church, where top politicians
and businesspeople are regular guests.

Heads the opposition PDP
in Lagos. He ran in two
gubernatorial elections,
losing both.

Yemi Osinbajo
Now vice-president, he worked
under Tinubu and helped rebuild
the judiciary. He is a pastor in the
Redeemed Christian Church of God.

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L AGOS: MA XIMUM CIT Y | FRONTLINE

district, sits in his ‘office’, a road divider stretching along the entire length of
Nnamdi Azikiwe Street. He and his crew
respond to greetings from passersby as
they puff on joints or drink cheap liquor
and intermittently play a medley of pop
hits from an old smartphone. “It’s Young
John The Wicked Producer,” one shouts.
They belt out the opening bars belligerently, stopping to dance and backslap
each other every now and then.
“We collect tickets from these drivers
and help secure the area”, says Rasaki in
English heavily interlaced with pidgin
and Yoruba. “Agbero no dey hungry,” he
continues, laughing that his job provides
him enough cash. He dropped out from
primary school at 10 and lives in a small
room where he pays N24,000 annually as
rent. Together with five others who work
in shifts with him, they act as lords of the
streets. So will Lagos confront, co-opt
or ignore the problem of these groups?
●●●

TRADITIONAL
LEADERS

O Rilwan A
Oba
Akiolu
The Oba of Lagos
angrily warned Igbos in Lagos
to vote for Ambode or “perish in the
water”. Claims to have resolved
conflicts between Tinubu and Fashola.

Oba Kabir Adewale Shotobi

Oba Raufu Adeniyi
Matemi Amore

Ayangburen of Ikorodu

Olu of Ikeja

THE HEART OF THE MATTER

BUSINESS LEADERS

Jim Ovia
The founder of Zenith Bank, he
owns the popular Lagos Civic Centre
on the Ikoyi waterfront and built
the 14-storey Civic Centre Towers.

Tony Elumelu
The chairman of Heirs Holdings
hoped to rebuild the Falomo
Shopping Centre before Ambode
cancelled the contract in February.

Chagoury brothers,
Ronald and Gilbert
They are huge players in Lagos real estate.
They own Eko Hotels and Resorts and the
ambitious Eko Atlantic City project. Linked
to former national leaders such as Sani Abacha.

Tayo Amusan
Builds malls across Lagos.

Aliko Dangote
Africa’s richest man convinced Fashola
that his new $9bn refinery complex
should be located along the Lekki
peninsula. That should make him a large
Lagos State taxpayer.

Prince Dipo Eludoyin
The billionaire was Tinubu’s choice
to be the Ooni of Ife, but he lost out. Said
to have supported Ambode’s campaign.

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ALL RIGHTS RESERVED

Gbolade Osibodu
His investments span banking,
shipping, oil and gas and power.
Jimi Agbaje is a director
of one of his companies.

The choices that city fathers make echo
downthedecades,andGovernorTinubu,
the spider at the centre of the web of patronage politics (see left) that has driven
development at breakneck speed since
the end of military rule in 1999, must be
wondering about his legacy.
A Lagos-based oil and gas investor
who deals extensively with the state government argues that Tinubu’s record in
Lagos is deeply ambiguous: “In some
ways you can compare his ambitions to
Robert Moses and Fiorello La Guardia
in New York,” the investor says. “Tinubu
wanted a patronage system that would
deliver some results on the ground, such
as the big private urban projects. But his
main aim was to run a really powerful
political organisation, using his Lagos
operation to build a regional base in
the south-west and then to contest for
power at the centre.”
AlthoughLagosiansdebatethesources
of Tinubu’s massive personal wealth and
real estate holdings as well as his record
on social policy as Lagos governor, few
dispute that he overhauled the state administration and has a knack of picking
talented young technocrats.
Indeed, many credit Tinubu with laying the foundations for his successors
as governor, Fashola and Ambode. At
his house on Bourdillon Road in the
bourgeois Ikoyi district, Tinubu hosts
and feeds successive waves of visitors
and supporters from all over the city. He
may not yet enjoy the influence he was

25

26

FRONTLINE | L AGOS: MA XIMUM CIT Y

seeking at national level, but he remains
the quintessential Lagos power broker
and dealmaker.
Deals are made every day in Lagos,
but Andrew Maki of the Lagos-based
non-governmental organisation Justice
& Empowerment Initiatives worries that
property speculation is getting out of control. In an echo of cyclical slum clearance
andcreationfromcitiesaroundtheworld,
Maki points to a resurgence of a handful
of land-owning families that are behind
slum evictions: “They are fictionalising
history to a certain extent. They are saying: ‘We owned all this land.’ But the way
that they work increasingly is very much
hand-in-hand with the government”.
What, then, of the man who now takes
up the reins of Africa’s largest city and
the challenges he faces? Certainly, governor Ambode will stick to Tinubu’s
script of patronage politics and limited
reform to an extent: his campaign was
financially supported by close Tinubu
associate and billionaire Prince Dipo
Eludoyin, as was Fashola’s.
A NEW CHAPTER FOR LAGOS

Ambode’s current priority is the ‘Light
up Lagos’ campaign, a promise to
bring street lights to all federal and
state roads by the end of 2016. Beyond
that, he may attempt to bring a cleaner
style of government. In August 2015,
he revoked a contract to revamp the
Falomo Shopping Mall on the grounds
that the deal with Afriland Properties
– owned by Lagos business heavyweight
and People’s Democratic Party stalwart
Tony Elumelu – included terms that were
“grossly detrimental” to Lagos State. He
claims to have saved the state N9bn in
just three months by restructuring government and is allocating that money to
healthcare programmes.
And Ambode has managed to push
major rail projects forward. In his first
few weeks in charge, the new governor is
said to have picked up the phone to President Muhammadu Buhari and got an
agreement on land use for the Red Line,
Lagos’s planned second metropolitan
light railway (see page 23). Before, the
Nigerian Railway Corporation, a company owned by the federal government,
had obstructed the deal as it owned the
right of way. Buhari finally approved of
the $2.4bn venture, which is no small
victory for Lagos. If those tracks are laid,
Lagos will take a major step towards
strengthening the talent, creativity and
wealth that make it a maximum city. ●

OPINION

Tolu
T
Ogunlesi
O

ournalist and Lagos resident
Jo

Change – mainly
for the better

T

wo decades ago,
Lagos was a byword
for urban neglect – not
only the longstanding,
big-picture brand of
neglect that starves a city of roads,
bridges and housing in the face of
an exploding population but also
the everyday, granular form that
overwhelms it with undisturbed
garbage and human roadkill. A lot
has changed for the better since
the turn of the 21st century, when
democracy returned to Nigeria
after a decade and a half of military rule. The soldiers who in 1984
overthrew the elected civilian government wasted little time leaving
their mark on Lagos – cancelling
a 1982 contract to build the city’s
first ‘Metroline’. The 28.5km project would perhaps have changed
the face of the city for good and
spurred extensions and upgrades
had it gone forward.
The military struck again in
1990. This time the target was
Maroko, a sprawling shanty town
set amid marshlands to the east of
theupscaleVictoria Islandthatwas
home to more than a quarter of a
million people. The bulldozers
rolled in and levelled the place,
with the government unmoved by
the backlash that followed.
It wasn’t all scorched earth
policies, though. The year 1990
was when, as a present from military leader Ibrahim Babangida,
the city got the Third Mainland

Bridge, sweeping 12km across the
filthy lagoon that sits serenely at
the heart of the city.
In1938,mygrandmotherarrived
here to attend secondary school.
The Lagos that welcomed her was
a city of fewer than a quarter of a
million people spread out across
two islands – Lagos and Ikoyi –
and the southern fringes of the
‘Mainland’ in Iddo, Ebute Metta
and Yaba. Bicycles were a standard
means of transport, and Grandma
remembers being fined once for
riding without a helmet.
In the seven decades since she
came to Lagos, she’s gotten herself an education, a civil service
job, raised four children, retired
and bought not only an apartment
but also a final resting place for
whenever the time comes. Not
any time soon, of course, as she’s
just about to turn 90.
She looms large in my sole
childhood memory of Lagos, from
the late 1980s, when my brother
and cousins and I came to visit.
Then in her sixties and without a
car, she herded us around town
in Danfos and Molues, showing
us the city’s sights and sounds.
As young as we were – I don’t
think I was 10 – I recall the selfconsciousness that assailed us all
as we sat in a bus and had to endure this elderly woman loudly
introducing us to a city where no
one minds their business.

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FRONTLINE

MONDADORI PORTFOLIO VIA GETTY IMAGES

the city’s historical quarter, underwent an astounding revamp that
started around 2007. Two years
later, the Gentrification Express
berthed in Oshodi, one of the city’s
main transport nodes. I don’t think
anyone ever imagined that Oshodi
could ever be sanitised. It was a
defining event for the legacy of
Babatunde Fashola, the state governor. It was also much criticised
as yet another heavy-handed intervention from a city that has never
learnt to even pretend that it cares
for its bottom millions.

Even though it feels like I’ve
lived in this crazy city forever, it’s
only been a decade. I moved to
Lagos in 2004, for work, as multitudes of young people have done
for decades. The Lagos that welcomed me almost 70 years after
my grandmother was a city of 15
million people.
In the decade since then, I
reckon more has changed about
it than in the two decades preceding it. Some changes have
been almost imperceptible: you
don’t exactly realise your city was
devoid of street signs until they
start showing up as though from
an invisible hand.
For a while now, the city’s grown
like a malignant disease. The Lagos
state government estimates that
two thousand migrants flood in
every day. The Lekki peninsula
that stretches eastwards from what
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•

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•

used to be Maroko is the city’s
fastest-growing corridor. Twenty
years ago, it was a string of swampy
villages; today landowning families and chiefs have sold so much
prized land they are now some of
the wealthiest people in the city.
The first decade of the 2000s
were landmark years for real estate developers. The Silverbird
Cinemas opened in Victoria Island
in 2004 – the first functioning
cinema in the city in many years.
In December 2005, the Palms
Shopping Mall opened, offering
21,000m2 of lettable space. And
then in 2007 news emerged that
the state government was planningaDubai-styledevelopmenton
land reclaimed from the Atlantic.
Today, the first skyscrapers on Eko
Atlantic City are being completed.
The Central Business District
(CBD) on Lagos Island, adjoining

M A R C H 2 016

In 1965
cyclists
shared the
pavement
with
pedestrians
and
motorists
stuck to their
traffic lane

In this second decade of the
21st century, the city has grown
more confident and more snobbish. It’s welcomed its first Porsche
dealership, as well as a slew of
luxury fashion stores. There are
the things that didn’t exist – or
barely did – a decade ago, but are
now being taken for granted: laundromats, gyms, smoothie bars,
pop-up stores, a suspension bridge
and high-rise buildings. Architect
David Adjaye has designed his
first building in Lagos – a 965m2
‘concept store’ that opened last
year in Victoria Island. Ambulance
points have sprang up across the
city;theemergencynumberworks;
the cops now cruise coolly around
town in US-style police cars. New
governorAkinAmbode’sobsession
is lighting up the city.
There are the things now forever
gone – Maroko-style – like the public executions that made Bar Beach
(now Eko Atlantic City) the preferred family entertainment spot
of the 1970s and early 1980s. The
days when larger-than-life criminal overlords took turns to hold
the city to ransom also appear to
be behind us for good. There was
Ishola Oyenusi, aka The Doctor,
in the 1960s, Shina Rambo in the
1990s and Hammani Tidjani in the
early 2000s. Since Tidjani’s empire
was brought down in 2003, there
hasn’t been, as far as I know, anyone with a similar profile. As some
have suggested, politics and the
rise of the internet have provided
potential criminal overlords with
far easier routes to prosperity. ●

27

28

POLITICS

AFRICAN UNION

All about

The AU goes into election mode as member states
decide who to back for AU Commission chair at the
next summit in July. The big question is whether
Nkosazana Dlamini-Zuma will stand again or repair
to South Africa to join the race for the presidency
By Crystal Orderson in Addis Ababa

T

he succession issue was not
on the formal agenda at the
African Union (AU) summit
in Addis Ababa at the end of
January, but it dominated
discussions between politicians, power
brokers, diplomats and activists.
The smart money is on Nkosazana
Dlamini-Zuma, chairwoman of the AU
Commission, moving back to South
Africa in July to take up a senior position in the governing African National
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29

number one
Congress (ANC). She remains a front
runner to win the party’s nomination
to be its presidential candidate in the
2019 elections.
But when she spoke of her plans to The
Africa Report in Addis Ababa, DlaminiZuma kept her cards tightly against her
chest: “No, I’ve not decided yet. I have
time to decide,” she said with a laugh. In
fact, she has until the end of March to
make a formal statement, which is when
the AU nominations must be submitted.
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Some South African diplomats chuckle
knowingly when the subject comes up.
They will not betray any confidences but
simply allude to ANC procedures. The
argument goes that Dlamini-Zuma was
deployed to Addis Ababa by the ANC
leadership. That leadership was largely
controlled by South Africa’s President
Jacob Zuma, her ex-husband and one
of her strongest supporters.
This year, that same ANC leadership,
albeit with a growing number of dissent-

ers, will redeploy Dlamini-Zuma to South
Africa and its tumultuous politics, or so
goes that line of thought. But that logic
will be tested at the next step. After quitting the AU, will Dlamini-Zuma be able
to face down a widening array of rivals to
win the ANC’s presidential nomination?
Opinion on the matter is divided in
South Africa. Dlamini-Zuma’s links with
President Zuma, whose star is falling
rapidly after a succession of political
errors, are now a mixed blessing, to say

PAN SIWEI/XINHUA-REA

Nkosazana DlaminiZuma, at the centre of
the AU summit group
shot – and of unofficial
speculation

POLITICS

AFRICAN UNION

countries would not compete for the
leadership of pan-African organisations.
Thathasbeenunceremoniouslydumped.
At the heart of the matter is the direction of the continental organisation
at a time of growing threats to regional
security and a deepening economic
downturn. Everyone agrees that African
states have to work more closely and effectively with each other. The AU should
be central to that, but there has been a
weakening of continental leadership
since the glory days of the organisation’s foundation in South Africa in 2002.
VITAL INJECTION
PAN SIWEI/XINHUA-REA

30

the least. The ANC Women’s League,
still proudly loyal to Zuma, is pushing
hard for Dlamini-Zuma to be the face
of the campaign to have the country’s
first female president (TAR75, Nov 2015).
But ANC heavyweights such as deputy
president Cyril Ramaphosa and secretary general Gwede Mantashe will not
lay out the welcome mat for her. They
have other women candidates in mind
for top ANC posts.
A senior South African diplomat explains:“She[Dlamini-Zuma]wouldcommit political suicide if she announces that
she has come back and wants to stand.”
Officially, the ANC disavows personal
ambitions, so she could not return and
make a grand announcement, he adds.
“The ANC is old fashioned, I really feel
sorry for Dlamini-Zuma. Look at what
happened to Tokyo Sexwale when he
announced his presidential ambitions!”
DETERMINED DAME

Such scenarios, debated in detail in the
corridorsoftheAUCommissionaswellas
the ANC headquarters at Luthuli House
in Johannesburg, raise more than a scintilla of doubt about Dlamini-Zuma’s intentions. Whatever she has decided – or
is yet to decide – will be based on clear
political calculation, according to a senior
ANC official. No one who knows her
doubts Dlamini-Zuma’s determination
when she makes up mind, argues the official: “When she planned on divorcing
President Zuma [in 1998] no black lawyer was willing to take on the case. She

Kwame Nkrumah’s vision of
pan-Africanism still seems out of
reach for the African Union

Dlamini-Zuma’s supporters in 2012
hoped she would inject new life into
the continental body. Dlamini-Zuma
had broken the mould: she was a forceful
politician willing to take on entrenched
male chauvinism; she was the candidate
of South Africa, then the biggest economy
on the continent; and she was running
against Jean Ping, one of the most experienced diplomats in Africa.
SomepraiseDlamini-Zumaforlaunching initiatives, like opening up the AU
to a wider public and cutting bureaucracy. She used the 50th anniversary of
the founding of the AU’s precursor, the
Organisation of African Unity, to set out a
bold vision for Africa in Agenda 2063 – a
blueprintforAfrica’sdevelopmentcrafted
together with the Economic Commission
for Africa and the African Development
Bank. But of the three pan-African organisations, the AU is still seen as the
weakest link – under-funded and prone
to internecine battles and turf wars.

didn’t feel intimidated and simply found
a white lawyer in Johannesburg to deal
with the case. That is Ma Dlamini-Zuma!”
Should Dlamini-Zuma stand and fight
at the AU, she may face a formidable rival
for the top job in the form of Ramtane
Lamamra, Algeria’s foreign minister. He
expertly chaired the AU’s Peace and Security Council from 2008 to 2013.
Already, Algiers has been taking some
not so discreet soundings about support for its candidate. It is likely to get
strong backing from its neighbours because a North African has
never headed the continDlamini-Zuma could face a
ental organisation. Francoformidable rival for the top
phone states, frustrated by
their loss of influence in the
job in Ramtane Lamamra
AU, see veteran diplomat
Lamamra as a powerful ally. At the same
Although Dlamini-Zuma repeatedly
told journalists that she wanted to move
time, South Africa and Algeria have been
close allies for decades – Nelson Manthe AU away from crisis management to
focus on social and economic developdela trained with the Front de Libération
Nationale in the early 1960s – so there
ment, her tenure has been haunted by
might just be scope for a backroom deal.
a rising tide of security emergencies: in
Almost certainly, Nigeria, whose citMali, Somalia, the DRC, Sudan, South
izens currently run the African DevelSudan, Central African Republic and
opment Bank and the African Exportnow Burundi. For her critics, DlaminiImport Bank, would surely join any such
Zuma’s opening address to the summit
in January confirmed her distance from
discussions. However, the spectacle of
AU realities: she did not refer to any of
three of Africa’s biggest states sharing
the pressing matters on the summit
out the leadership of its organisations
agenda, instead she chose to celebrate
would likely go down badly with many
of the smaller states. For many years, the
the positive contribution that artists
unwritten rule was that Africa’s biggest
have made to Africa’s development. ●
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POLITICS

32

AFRICAN UNION

INTERVIEW

Nkosazana Dlamini-Zuma
Chair, African Union Commission

If Burundi’s situation deteriorates,
we must do something
The AU Commission chair talks to The Africa Report
about security hotspots, the need for more African funding
for the continental body and her political future

VINCENT FOURNIER/JA

TAR: Could you explain what
the AU summit decided on the
Burundi crisis? Will the AU be
sending in a delegation or even
a peacekeeping force?
NKOSAZANA DLAMINIZUMA:
Theideawasthatahigh-levelpanel
should go and sit down with them
[President Pierre Nkurunziza’s
government] to discuss with them.
The end is peace and security and
stability in Burundi. So if there is
peace and stability […] then it’s
fine. But if it doesn’t happen, there
should be an opportunity for the
AU to go to Burundi to try and
persuade them to allow the AU
to assist them. At the moment,
it’s not on the table […] in terms
of going in without [the government’s] permission. But it’s on
the table to have a dialogue so
that you can keep monitoring
the situation. If the situation
improves without it, then we
are all saved. But if it deteriorates, then we have to
do something.
You have been
vocal about
theneedfor
the AU to
be more

financially independent. What’s
the progress on this?
It’s coming, because Angola has
moved [to pay more]. Other countrieshave been volunteering to pay
more: Kenya, Ethiopia, Chad. It’s
beginning to dawn on them that if
we are not self-reliant in terms of
our organisation, then it’s going to
be difficult. The discussion about
alternate sources of funding is still
on the table. There is a decision to
have a retreat of heads of state, foreign ministers and finance ministers to discuss [the financing issue]
because they really want to see
movement in this area. The matter
has been debated and discussed
for about 14 years without any
conclusion. Now there’s even
a commitment to say [member states] must gradually
increase their payment of
programmes to a level of
75% from Africa and 25%
from donors. And there’s a
commitmenttocontributing
25% [of funds for] the Peace
and Security Commission
and 100% of [the AU’s] operational costs.

We are going to be working with
countries, together with the Economic Commission for Africa, to
see what alternate sources of funding we can get. It was interesting
during Ebola that the telecoms
companies and regulators agreed
tohavetheseSMSswhere,bysending SMSs, people made a contribution towards [stopping] Ebola.
Are the AU and regional organisations making progress on a
political agreement on South
Sudan and ending the abuses
such as gang rape?
There were no strong political and government institutions
[in South Sudan]. And disputes
that were taking place within the
party degenerated. But also, it’s
about the control of resources.
We are hoping that the Sudan
People’s Liberation Movementin-Opposition will come back in.
I’m told their advance team has
arrived [in Juba]. But the leadership [former vice-president Riek
Machar and his allies] must also
arrive there because without an
inclusive government it will be difficult to deal with all those things.
What is the timetable for this
year’s leadership elections in
the AU Commission?
As far as I know, the rules say
that the names of the candidates
must be with member states three
months before the next summit, so
you can work it [out for] yourself.
Have you decided whether you
will stand for another term?
No, I’ve not decided yet. I have
time to decide.
You have time to decide?
Why? Why are you asking these
questions? Are you one of them
that wants to know? [Laughs]
AlotofpeopleinSouthAfricaare
lobbying for you to come back.
It’s the issue of a woman president that we’re discussing this
year. Would you make yourself
available if the ANC asks?
Just wait. We will see. There
is time to decide
[Laughs]. ●
Interview by C.O.
N ° 78

Offer valid until 30/06/2016. In accordance with Article 34 of the Information Technology and Freedom law, you have the right to access, modify or delete data concerning you by contacting The Africa Report.

Q2-TAR16

❏

PAYMENT IN

34

POLITICS

BURKINA FASO

Jostled priorities
The country’s new president is promising radical
change in the way Burkina Faso is governed, but his
previous attempts at revolution did not end so well

I

n early December, in a tiny bar on the
outskirts of Ouagadougou, a man was
celebrating the election of Roch Marc
Christian Kaboré, now his country’s new
president. Evoking the name of Kaboré’s
party, the Mouvement du Peuple pour le
Progrès, he sang: “MPP! We have won!”
From among the spectators, sitting on
rickety chairs and watching the man’s
victory dance, came a comment: “Hmm.
MPP. Mouvement Pilim Pabé. I don’t
believe them.” But the dancing man was
not to be deterred. Holding on to his beer
he shot back: “You just wait and see. We
will get this country to work!”
All this went on in good spirits. This
is, after all, Burkina Faso, where people
often reserve their anger for politicians
whobreaktheirpromises.Butwhatabout
Mouvement Pilim Pabé? The phrase plim
pabé in Mooré, the language spoken by
the Mossi, means “win by deception” or,
more elaborately, “putting a cloth over
someone’s head so he does not know
who is hitting him.”
Herein lies Kaboré’s first challenge. He
must show that he and his party are differentfromthe autocratBlaise Compaoré
and his Congrès pour la Démocratie et le
Progrès (CDP), who were overthrown in
an uprising in October 2014. The MPP
appears to have inherited the CDP party
structure and its methods of vote buying, either directly or through pliable
local chiefs. At least that is what a recent

report from the Réseau National de Lutte
Anti-Corruption says.
And what about Kaboré himself? After
all, he was on board with the previous
government for 25 years. Chrysogone
Zougmoré, a veteran human rights activist and part of the movement that
toppled Compaoré, sees a changed man.
“During his inauguration, President
Kaboré remarked that he had taken
the lessons from the October uprising
to heart. I had the impression that he
was aware of what that meant.”
At his swearing-in, Kaboré laid out
his ambitious priorities for a new start.
High on his agenda is to “reform institutions and modernise the administration to allow for more social justice,
democracy and freedom.” He promised
more investment in education and the
deployment of new technologies, and he
laid out his plans to reform the constitution and “bring about a better sharing of
the fruits of economic growth through
a new social contract.”
A NEW START

Truth, justice and reconciliation are other
majorthemesthatKaboréhasfocusedon.
Oppositionists and civil society members
want to know how far the government
will go in addressing the corruption of
Compaoré’sgovernmentandtheongoing
problems with the armed forces. The list
of people under investigation for links to

Outside
the capital’s
Splendid
Hotel two
days after
a jihadist
attack by
gunmen on
15 January

a recent coup attempt is getting longer,
and the latest person to be arrested is
formerrulingpartybossEddieConstance
Komboïgo, on 22 January.
For their part, Kaboré’s supporters are
worried that if he spends too much time
focused on the past, he will not address
structural problems. The percentage of
the population under the poverty line
was 46.7% in 2009 and the primary school
enrolment rate was just 87% in 2013.
Activists say they won’t be fooled by
Kaboré’s promises. The main lesson of
Compaoré’s fall is this: if you manage

Between Roch and a hard place
ROCH MARC CHRISTIAN KABORÉ comes from a well-to-do
family. His father Charles was a deputy governor of the Banque
Centrale des États d’Afrique de l’Ouest in Dakar, where Roch
also served and where he picked his prime minister, Paul Kaba
Thiéba. He followed a well-trodden educational path through
secondary school in Ouagadougou and then on to France,
where he obtained a degree in business management.
As a young man, Kaboré was of a radical persuasion, but
he was also flexible. Part of Thomas Sankara’s revolution in the
1980s, he changed tack when Blaise Compaoré overthrew the
revolutionary leader. The move paid off handsomely. Kaboré
rose to become executive secretary in Compaoré’s ruling

Congrès pour la Démocratie et le Progrès (CDP), presided
over the national assembly and served as prime minister.
Kaboré’s political instincts haven’t deserted him. He sensed
revolution in the air, just as much as he sensed that as long
as his old friend Blaise was around, he would never be
president. In January 2014, he took two other CDP bigwigs
with him and set up his own party.
Compaoré hasn’t forgiven Kaboré for his betrayal and is
now seething in exile, but Kaboré has got the job he always
wanted. What remains to be seen is whether he can deal with
the popular forces who overthrew his predecessor and are
demanding the follow-through of their own revolution. ● B.P.
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POLITICS

by the terrorist attack on 15 January, are
recovering, but the Cappuccino restaurant, where most of the 30 victims were
killed, is the same burned-out black hole
the killers left behind.
Tackling the terrorism threat means
beefing up intelligence and getting the
securityforcesthekindofequipmentthey
need to do their jobs. That is something
the French troops stationed here could
usefully help with, suggests Zougmoré.
“Our security forces are brave,” he
says. “We all saw that on 15 January.
We also know that the French presence
attracts terrorists. Therefore, after they
have provided the tools we need, we will
kindly ask them to leave. Remember that
weneverneededanyforeignassistanceto
get rid of Compaoré and his presidential
guard. We did that ourselves.”

ISSOUF SANOGO/AFP

THE OLD GUARD

the country badly, the people will chase
you out of office.
“Kaboré knows a thing or two about
the spirit of the Burkinabé,” Zougmoré
observes. “He is a warned man.”
There is one area where Burkinabé
minds are focused: justice. There are
cases that are in urgent need of treatment. First is that of Thomas Sankara,
the revolutionary president who died in
the 1987 coup Compaoré co-organised.
Then there is the case of Norbert Zongo,
an investigative journalist who asked
awkward questions about corruption and
was murdered in 1998. There is also the
case of Boukary Dabo, a student leader
who was killed in 1990 under murky
circumstances. All of these are under
investigation after years of inaction.
One of Burkina Faso’s most prominent
rap artists, Smockey, was at the heart of
the uprising that chased Compaoré from
power. Sitting at the controls of his studio,
he says: “There is no choice. I think there
will be results from those big cases like
Zongo and others. Soon. Those who are
in charge of these dossiers know that if
the results do not conform to our sense of
what constitutes justice, we’ll take to the
streets again. That’s the kind of pressure
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Compaoré’s presidential guard was
known as the Régiment de Sécurité Présidentielle (RSP). Dealing with the remnants
of this unit is a job that brings together
many strands: faith in institutions, justice,
security and even international relations.
The RSP staged a failed coup in September 2015, said to have been with the help
of top officials from the previous government and some of their friends in neighbouring Côte d’Ivoire. The enigmatic
General Gilbert Diendéré, the security
linchpin of the Compaoré government,
emerged as the coup leader. He currently
resides in a military prison awaiting trial.
In the wake of the January attack,
Ouagadougou was buzzing with conspiracy theories that it was the handiwork of the ex-president’s political and
military network, but there is little
evidence supporting those claims.
The last renegade members of the

that we need to maintain. If the government really wants people to regain faith
in the institutions of the republic and
recognise state authority, then it must
treat these cases well.” The president is
indeed a warned man.
There is work to be done on the economy. The African Development Bank
predicts an impressive 7% growth rate
for this year but this is mainly playing
catch-up. Prices for gold and cotton, the
country’s two main foreign exchange
earners, have been weak
and show no sign of picking
Kaboré must show that he
up. Agriculture and services
and his party are different
– including tourism – could
generate the jobs that are so
from Compaoré and the CDP
badly needed, but developing these sectors will take more time,
now-disbanded RSP made a desperate attempt to seize a munitions depot
money and effort. Aid money should
soon start flowing back in, but very little
just outside the capital on 22 January,
of it trickles down to the people who
but it ended in complete failure. Elmade the October 2014 uprising happen.
even attackers, possibly the last of the
If all this is not enough for the new
once 1,300-strong RSP, were arrested.
Kaboré team, led by Prime Minister Paul
That may have been the last hurrah for
Kaba Thiéba, another challenge is evidCompaoré’s security apparatus, but
enced on the capital’s glamorous Avenue
it does not yet show how far Kaboré
Kwame Nkrumah: maintaining security.
will go towards turning a new page in
The Splendid Hotel and the Taxi Brousse
Burkina Faso. ●
Bram Posthumus in Ouagadougou
bar across the street, two of the places hit

35

36

POLITICS

INTERVIEW

John Dramani Mahama
President, Ghana

We must keep working
on our negotiation skills
Mahama is more popular than his party, but he faces
criticism of recent energy deals. Polls already indicate
a tight race ahead in the November national elections

A

light breeze wafts
through the royal
palms at President
John Dramani Mahama’sofficialhome
in the Cantonments area of Accra.
Inside the expansive villa there
is a serene calm as officials pore
over transport schedules for a visiting delegation of first ladies. In
marches Mahama himself, smiling, dapper and looking remarkably untroubled at the prospect of
fighting an election in November
in which his chances are reckoned
at best to be 50-50, even by some
of his supporters.
The previous day a strategist
from the governing National
Democratic Congress had told
The Africa Report that his party’s
latest polls showed a dead heat
of 45% support for Mahama and
the same for Nana Akufo-Addo,
the presidential candidate of the
opposition New Patriotic Party.
“That 10% of undecided voters
are what this election will be all
about,” added the strategist.
A year ago, most of the areas
along the coastline – including in
the three ‘swing regions’ of Accra,
Central and Western – were suffering from chronic power cuts.
The cedi was falling precipitously,
inflation was heading for 20%, the

prices for Ghana’s oil and gold exports were heading south and the
International Monetary Fund was
demanding harsh budget cuts in
return for a cheap loan. Today,
that economic backdrop is little
changed, with one vital exception:
the government has kept the lights
on since the beginning of the year.
Over the next nine months,
Mahama has to persuade voters
that this is the start of a longer-term
economic turnaround. Even if he
succeeds, the political cost could
be high for his party. The paradox
in the presidency is that Mahama
is much more popular than his
party. An Accra-based businessman who sells information technology systems to the ministries
explains: “He’s an open sort of guy,
not bombastic or arrogant, but the
party is seen as out of control and
greedy. Weirdly, he’s one of the few
top politicians who could lose an
election and quite happily go off
and write books or something […]
but you can’t say that for many of
the people around him.”
TAR: After the Ouagadougou
attacks, do you have concerns
about security in Ghana?
JOHN DRAMANI MAHAMA: I do
have concerns. Any president who
does not is not living in the real-

MAKING HIS
OWN HISTORY
29 November
1958 Born
in Damongo,
Northern Region
1981
BA in history from
the University
of Ghana, Legon
1995
International
relations officer
for NGO Plan
International
1997 Elected
to parliament
to represent Bole
2009 Became
vice-president
July 2012
Acceded to the
presidency on
the death of John
Atta Mills
December 2012
Elected president

ity of our current time. There is a
linkage between North Africa and
West Africa: we have the Sahara
and the Sahel between us and
there are various groups operating in that area where security is
a bit lax. And that has created the
probleminnorthernMaliandthen
also the recent attacks in Burkina Faso that were claimed by Al
Qaeda in the Islamic Maghreb. We
must work together to deal with
terrorism, share intelligence, share
information and collectively shape
our response to groups trying to
create mayhem.
InvestigativejournalistAnasAremeyaw Anas has exposed appalling dishonesty among some
judges. Will this prompt you to
launch wholesale reform of the
justice system?
EvenbeforeAnas’sinvestigation,
we had serious reform measures
in the judiciary […]. The response
to the investigation was prompt.
When I received the petition, I referred it to the chief justice, who
set up the commission of enquiry.
The commission of enquiry has
delivered its report, and judges
have been dismissed for impropriety. What we have not talked
enough about are the judges who
walked Anas out of their houses
andthreatenedtohandhimoverto
the police [when he offered them a
bribe]. We do have upright judges
who cannot be influenced, and so
I think we should celebrate that,
and at the same time deal with the
impropriety that Anas’s investigation unveiled.
Inyourautobiography,youwrote
about the horrors of market
crashes and structural adjustment programmes. Do you fear
history may be repeating itself?

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in a sustainable manner for the
long term. And I want to thank
Ghanaians for their patience in the
difficult times. What we’re trying
to do is to sustain enough power
to Ghanaians and possibly to becomethepowerhubofWestAfrica.

FRANCIS KOKOROKO FOR TAR

However, the big criticisms being
made are that the new projects
are not sustainable and there is
a dearth of information about
these contracts.
There’s not a dearth of information because all the documents
and agreements are in parliament.
There are many factors that go
into negotiations, like political
risk. Negotiations for a barge in
Asia, in Thailand, will not be the
same as negotiations for a barge
in say Ghana or Nigeria. Secondly,
emergency power solutions are
always more expensive than ordinary power solutions.
We must continue to sharpen
our negotiation skills and get the
best deal out of everything that we
do. What I’ve done as president is
to refer the AMERI negotiation [a
controversial $510m contract for
gas turbines with a Dubai-based
company] to PwC to advise us
whether we negotiated properly.
This report will serve as a guide on
what the benchmark should be.

No, Ghana’s economy is much
more resilient than it was in the
1980s. Even so, we are putting in
place prudent measures: the structural reforms that we are carrying
out make the economy better able
to withstand such shocks. One of
the most critical things is to ensure
that we maintain macroeconomic
stability, try to get inflation down
andbringinterestratesdowntoensurethatwehaveastablecurrency.
There have been some benefits
from world markets. Even though
we’re losing revenue in terms of
exports of oil, we’re also gaining
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•

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•

on the import side because we
also import petroleum products.
That has given us the opportunity
to take off some heavy subsidies
that we used to have to spend on
petroleum products.
W h a t ’s h a p p e n i n g w i t h
electricity?
We have a new infusion of about
470MW into the system: the barges
[floating power plants] and then a
gas-fired plant at Aboadze […]. All
these interventions have helped to
reduce the gap between demand
and supply. We’re trying to fix this

M A R C H 2 016

So and if they identify a problem,
you will cancel it?
The point is we cannot cancel
the contract because it will lead
to a judgment debt [against the
government]. The plant has been
built, and it’s producing power.
What we’re doing is we’re bringing more skills on board. So for
instance in the Eni negotiations,
we had the World Bank with us.
I’ve heard the terms of the Eni
deal are terrible. So if there’s a
problem, then the World Bank
has a case to answer.
Yes. The ministry of power has
responded, and I will show you
what went into the negotiation.
You must also take the timing of
the negotiation intoaccount.At the
time that we were negotiating, the
oil market was at a certain price. ●
Interview by
Patrick Smith in Accra

Lomé shows
the way

The Port
of Lomé’s
1,145-metre
dock and
16.6-metre
draught can
accommodate
the world’s
biggest supercontainer ships.

The October 2016
Lomé Summit must
address vital issues
for Africa’s future,
including piracy,
illicit fishing and all
kinds of trafficking,
which threaten
the continent’s
economies.

T

he Autonomous Port of
Lomé, Togo’s economic
heartbeat, has confirmed
its position as an indispensable
transshipment hub for the countries of West Africa. To achieve
that goal, in the past four years
over $600 million have been invested in updating port facilities
and their management.
The bet has paid off: the number
of ships calling at the Port of
Lomé rose by 48.7% in the first
half of 2015. What’s more, the
volume of containers processed
soared by 161% and transshipment activity by 444%!

Togo will host an
extraordinary African
Union summit
in October 2016
For this growth to continue within
a context of rising piracy and environmental risks, Togo has offered
to host an extraordinary summit
of African Union Heads of State
and Government on maritime
security and development in
Africa in Lomé in October 2016.
The meeting aims to make the sea
an engine of the continent’s economic and social development. ■

ADVERTORIAL

The deepwater Port of Lomé at the sub-region’s service
Togo has started developing its economy while contributing to regional
integration. Transport infrastructure is a vital link in this strategy. Now that
the Port of Lomé has been expanded, a 760-kilometre land transport corridor
will link it to Cinkassé, on the border with Burkina Faso, strengthening
Togo’s position as a goods transit hub serving neighbouring countries.


A road corridor
will link Lomé
and Burkina
Faso to increase
the amount of
goods that can
transit through
West Africa.

An unprecedented development
plan for the Port of Lomé

I

n 2 011, To g o ro l l e d o u t a
development plan to quadruple
capacity at the Port autonome
de Lomé (Autonomous Port
of Lomé, PAL) from 400,000
twenty-foot equivalent units
(TEU) in 2013 to over two million
TEU in the short term. The plan
has already boosted the port’s
efficiency and accommodation
capacity, benefitting not just
Togo but also its neighbours, first
among them Burkina Faso, Ghana,
Niger, Benin and Mali. It includes
two major building projects now
nearing completion.

More and bigger ships
and greater efficiency
with the third dock
I n O c to b e r 2 014 , P re s i d e n t
Faure Essozimna Gnassingbé,
with his Beninese and Nigerian
counterparts in attendence,
inaugurated PAL’s third dock,
which Togo Terminal built at a
cost of 300 billion FCFA (€457
million). It boasts a 15-metre
deep, 450-meter long basin —
increasing the total length to 920
metres — that can accommodate

high-capacity ships. Its storage
capacity has tripled.
The dock boasts two state-ofthe-art gantries and eight mobile
cranes, allowing several ships to
operate simultaneously. Computer
terminals let staff and customers
monitor operations in real time.
The facility will help to create
500 direct jobs and boost
government revenue.

The new container
terminal will lower
regional shipping costs
Global Terminal Limited (GTL)
and China Merchants Holdings
(CMHI) each own a 50% stake in
Lomé Container Terminal (LCT),
which began operating in October
2015. Built with €324 million in
financing from several lenders, the
transshipment facility can handle
2.2 million containers a year.
T h e 1,14 5 - m e t r e d o c k a n d
16.6-metre draught can accomm o d a te t h e wo r l d ’ s b i g g e s t
super-containers, such as the
300-metre-long DS National
Monrovia, which reached Lomé
from Shanghai in December 2014.

LCT’s dock currently has six
gantries, but that number will
eventually rise to 12 in order
to achieve economies of scale
and cut regional shipping costs.
Transshipment accounted for
just 5% of PAL’s activity before
LCT opened. ■

The One-Stop Foreign
Trade Window is open
To g o ’ s O n e - Sto p Fo re i g n
Trade Window (GUCE, for
Guichet unique du commerce
extérieur) gradually started
entering into service in 2014.
The pilot stages began in
July 2014 with import and
maritime export activities at
PAL. GUCE offers round-theclock access to a paperless
internet platform. It cuts
costs, reduces the amount
of time it takes to carry out
c o m m e rc i a l t ra n s a c t i o n s
and logistical operations,
streamlines import, export
and transit procedures and
improves PAL’s governance.

MARITIME TRANSPORT

TOGO
T


The container
scanner’s control
post at the Port
of Lomé.

The aims of the conference
on maritime security
and development in Africa

T

ogo invited the African Union’s Heads of
State and Government
to Lomé for an extraordinary
summit in October 2016 on
maritime security and development in Africa. The conference will address several issues
vital for the continent’s future .

Improving maritime
security cooperation
PUTTING AN END TO ACTS
OF PIRACY
Maritime piracy has been rising
for over a decade, first in the
Horn of Africa, then in the Gulf
of Guinea, where 51 attacks were
recorded in 2013.
In addition, West Africa has
become a transit route for smuggling drugs into Europe. These
challenges require comprehensive responses, including a spe-

cial legal framework, means of
surveillance and the intervention
of sub-regional coordinating
bodies.
COMBATTING ILLICIT FISHING IN AFRICAN WATERS
Illicit fishing depletes stocks,
destroys marine habitats, unfairly
competes with formal fishermen
and undermines coastal communities. It also results in a loss of 170
billion FCFA in revenues in West
Africa alone every year.
That is why African countries must
invest more to acquire advanced
surveillance and monitoring
equipment. The AU also aims to
create a certification scheme for
imported and exported catches.
CURBING TRAFFICKING
OF EVERY KIND
Illicit trafficking in manufactured
goods or agricultural products,

ADVERTORIAL

The Maersk Lomé honours Togo’s efforts
Danish shipbuilder Maersk named a cargo ship after Togo’s capital to
acknowledge the country’s efforts to improve shipping and maritime security
conditions in the Gulf of Guinea. Completed in March 2015, the 255-metrelong, 37.3-metre-wide vessel boasts a capacity of 5,446 containers. Christened
the Maersk Lomé, it docked in Togo’s capital on 21 July.

imported or exported through
port facilities, jeopardise African
countries’ economic activity and
harm their ability to trade with
the rest of the world. It is important to set up physical, security
and social infrastructure to fight
this scourge and create more
formal jobs.

The sea, a key to
Africa’s development
EFFICIENTLY MANAGING
RISING TRAFFIC
Africa must plan for an unprecedented rise in trade, especially
by building modern ports like PAL
to accoommodate more and bigger container ships and efficiently
manage traffic.
PRESERVING THE MARINE
ENVIRONMENT
The expected rise in maritime
traffic means that countries must
foresee and limit their ports’ environmental impact and protect
the biodiversity of coastal areas.
Handling dry bulk, transferring liquid chemicals or emitting vapours
can endanger the food security of
over 200 million Africans and the
livelihoods of more than 10 million
of them. ■

in p ar t icu lar by sta n d a rd isin g
the terms of prosecuting
perpetrators of criminal acts,
reducing environmental damage
and promoting the ratification and
implementation of international
legal instruments.
It must develop coordinated longterm action plans to spell out the
steps required to reach those goals.
Another priority of the 2050 AIM

Africa’s voice at the UN in 2012 and 2013
Togo sat on the UN Security Council as a non-permanent member for
two years from January 2012 to December 2013. During that time, the
country used its power to put the fight against piracy in the Gulf of
Guinea at the heart of the international agenda. Togolese diplomacy
also emphasized the impact of transnational organised crime (trafficking in drugs, weapons, people, etc.) on West Africa and stressed the
need for coordinated actions to respond.

A pan-African strategy
for the seas and oceans
The sea in Africa
and the world
■ 75% of the world’s main fisheries
have been overexploited or are
already depleted.
■ $2.5 trillion a year in the world
come from oceans (fishing, tourism,
transport, etc.).
■ 90% of Africa’s imports/exports
are by sea.
■ One in five acts of piracy in the
world occurs in the Gulf of Guinea.
■ Maritime security causes an
annual 4.1% decrease in bulk goods
shipping.
■ The estimated annual cost of illicit
fishing is put at between $10 billion
and $23 billion.

n the area of development,” says
President Gnassingbé, “the Lomé
Summit will focus on Africa’s
Integrated Maritime Strategy for
2050 (the 2050 AIM Strategy) to
speed up its implementation plan
and give it more steady backing.”
Experts from universities,
international and sub-regional
organisations, trade groups, NGOs
and economic communities drew
up the 2050 AIM Strategy under
the aegis of the African Union
Commission. The plan seeks to
create more wealth from Africa’s seas
and oceans by fostering a thriving,
sustainable, safe and environmentfriendly blue economy.

POLITICS

ANALYSIS
President
Buhari’s
message
for Europe:
get behind
the Joint
Task Force

MANISH SWARUP/AP/SIPA

42

NIGERIA

Battling insurgents
and markets

ages between Boko Haram and the more than 5,000 Islamic
State fighters in Libya. On 5 February, Buhari and his advisers
had a closed-door meeting with Alex Younger, the director of
Britain’s Secret Intelligence Service. Next on Buhari’s itinerary
was North Africa and the Middle East, and meetings with the
heads of state of Egypt, Qatar and Saudi Arabia.
Under Buhari’s tutelage Nigeria has greatly strengthened
Buhari faces security and economic
its credibility and diplomatic ties, but progress on all fronts is
crises a year after the landmark election stymied by the country’s worst economic crisis for two decades. On economic strategy, the Buhari government is far more
selective about the advice to which it will listen. A chorus of
s President Muhammadu Buhari addressed the
economic analysts are calling for a sharp devaluation of the
European parliament, currently obsessed with the
naira, which has been trading on the parallel market for less
tide of refugees sailing across the Mediterranean, he
may have been tempted to add: “And you think you’ve got probthan a third of its official rate of N197 to the dollar.
For now, Buhari’s government is holding firm in his resistance
lems?” Buhari used his stopover in Strasbourg on 2 February
to a devaluation, which he fears would drive up prices, further
to explain that his country’s battle against the Boko Haram
insurgents – now formally affiliated to the Syria-based Islamic
hurting his main constituency, the majority of the country’s
State rebels – would need stronger international backing.
175 million people who eke out a living on about $2 a day.
Specifically, Buhari is looking for $700m to fund the
Yet as new capital controls and foreign-exchange restrictions
8,700-strong Multinational Joint Task Force, which groups
bite, importers and manufacturers are already raising prices.
armies from Cameroon, Chad, Niger and Nigeria. So far, some
At the heart of this is an argument about bearing the pain
$250m has been raised in contributions from Nigeria, France
of the economic meltdown. Government officials say most
and Switzerland. An international conference is due in May
of the burden should fall on the ‘less than one per cent’ who
between the main troop-providing countries, France and
benefited from Nigeria’s boom in the past decade when the
other European powers to bolster the N’Djamena-based force.
price of oil went as high as $135 per barrel. Then foreign exThe multinational force’s results have so far been very limchange was shovelled out of the country: tens of billions of
dollars in overpriced contracts and tax evaited, one of Buhari’s security advisers tells
sion schemes, as well as more than $50bn
The Africa Report: “After losing most of its
that was used by crooked politicians and
territory, Boko Haram has changed tactics
business people to launder their cash.
to hit-and-run attacks and suicide bombNow it is payback time, says finance minisings, particularly in Cameroon and Chad
Buhari’s government
ter
Kemi Adeosun.She says thegovernment’s
[…]. We need more troops on the ground
is planning on a large
target of N4.9trn ($24.6bn) in tax revenue for
and air power to deal with this.”
borrowing programme
After the Strasbourg meeting, Buhari spoke
2106 – almost 80% of it from corporate tax
to finance the budget
at a conference in London on the Syrian war
and value added tax – is “non-negotiable”.
and new investment
and its regional effects, pointing out the linkOil companies could owe as much as $10bn

A

$3.5bn

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POLITICS

in tax from payment shortfalls and wrongly applied tax waiver
schemes, according to analysts at the state oil company. And
with hefty fines for companies such as South Africa’s MTN
and a raft of local banks that have fallen foul of regulations,
the government has parked its tanks on the corporate lawn.
This test of wills could prove as important for Nigeria’s future
as the ground war in the north-east. ●
Patrick Smith in Lagos

ZAMBIA

A time for alliances
Political parties are scrambling for allies
ahead of the August polls

N

VILLARD/SIPA

ew constitutional provisions signed into law in January could make the August national elections a closer
race, as both the governing Patriotic Front (PF) and
opposition United Party for National Development (UPND)
try their hands at forming alliances. The winning candidate
in August will need 50% plus one vote now that the first-pastthe-post system has been scrapped. President Edgar Lungu
has openly told PF members that the party alone could not
marshal the votes for an outright presidential victory. The race
is set to pit him against perennial oppositionist
Hakainde Hichilema and his UPND.
After cementing his leadership of the PF
following the succession struggle after the
death of Michael Sata in October 2014,
Lungu was expected to win this year’s
presidential poll easily. But the PF has
failed to deliver on many of its promises
that attracted new voters to sweep the party
into power in September 2011.
Since then, the PF government
has front-loaded investment
in roads, power and railways
but now finds itself haunted
by its over-expenditure on infrastructure, coupled with the
fall in the price of copper. In
February, the state closed
the top two public universities after students went on
the rampage protesting at
non-payment of allowances.
Other constitutional reforms are adding to political tensions ahead of the
polls. Now candidates must
choose a running mate. Top
PF members like justice
minister Ngosa Simbyakula, information minister
Chishimba Kambwili, forWhy the Lungu
face, Edgar?
THE AFRICA REPORT

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M A R C H 2 016

eign affairs minister Harry Kalaba and current vice-president
Inonge Wina are some of the frontrunners for Lungu’s ticket,
but the selection process is likely to create him some enemies.
Party unity is already proving problematic for Lungu. Sata’s
nephew Miles Sampa resigned from his post of deputy commerce minister in January and was set to focus on his new
party, the Democratic Front. Sampa now says that he will remain in the PF, but many of his colleagues doubt his loyalty
and say he was aiming to be Lungu’s running mate.
The PF has a Bemba ethnic group majority and with
Lungu embracing many former Movement for Multiparty
Democracy (MMD) members – led by former president
Rupiah Banda – there is growing disenchantment among
PF founding members, especially those who were close to
Sata. The MMD is now divided, with factions led by former
televangelist Nevers Mumba, former commerce minister
Felix Mutati and former president Banda.
After years of strong growth averaging 6% per annum, the
Zambian economy is going through headwinds, with a major drought and massive job losses, especially in the mining
sector. The UNPD’s Hichilema, a supporter of free markets,
largely campaigns on economic management issues but has
not fully used current economic woes to prop up his fortunes.
Polls show that voters say the wealthy Hichilema lacks the
common touch. If the new constitution forces the opposition
to unite to challenge Lungu, the president may have won a
populist victory with his reforms but also scored an own goal
by risking the PF’s political future to do so. ●
Christopher Mwambazi in Lusaka

ETHIOPIA

Drought and doubt
Is the government prepared for the
worst drought in decades?

T

hough rains began to fail in early
2015, the alarm bells did not ring in
earnest until October. Ethiopia’s government is trying to industrialise this vastly
rural country, but the farmers who make
up about 80% of the population remain
vulnerable to changing weather patterns.
Last year, the Pacific Ocean water-warming
phenomenon called El Niño led to disappointing rains in many of the country’s
eastern areas. By October, widespread crop
failure was impossible to ignore.
This has been Ethiopia’s worst drought
in decades – even worse than the one that
catapulted the country into the spotlight
as a poster child for aid in 1984. But the
Ethiopian government is tired of that story.
Its officials prefer to promote the country’s
more recent reputation for double-digit
economic growth, construction booms
and foreign investment. On the other hand,
non-governmental organisations and the

43

44

POLITICS

government’s development aid partners are sounding more
worried about the crisis. John Graham, the country director
for Save the Children International, which recently issued an
urgent call for $245m in funding to prevent a potentially disastrous break in the food aid pipeline, explains: “Unless we
do everything in our power to deal with this very enormous
drought, it will result in massive problems and suffering.”
The government’s tone has been more measured. Officials
point out that this drought is not a famine, in part because of
early responses like its allocation of $272m last year and $109m
so far in 2016. They also note that resilience has been at the
heart of the government’s development plan for years, most
notably with the Productive Safety Net Programme (PNSP),
which delivers aid to chronically food-insecure communities in exchange for labour. An assessment in December, carried out by the government and international agencies, put
the number of people in need of emergency food aid at 10.2
million. The government says that of the $1.4bn requested to
address this crisis, 46% has already been allocated. Another

7.9 million people have also been identified as beneficiaries
for this year’s round of the PSNP, which is funded separately.
Foreign aid workers generally agree that the government has
been proactive. But they emphasise that this is a slow-growing
crisis. The worst season for food insecurity does not typically
begin until mid-year, and it is difficult to attract donors’ attention with crises like Syria competing for funding.
Government spokesman Getachew Reda argues that the
drought will not seriously threaten economic growth, in part
because other sectors have been less affected by the changing
weather. “This is our worst drought, but it doesn’t translate
into the same kind of disaster that followed 1984 because
Ethiopia is now better prepared,” he adds. “We would love to
see a situation where people have a clear understanding of the
situation on the ground that is not based on sensationalism.”
That would mean that the government, which often represses
critical voices, would have to provide access to journalists and
researchers interested in ensuring that the official narrative is
Jacey Fortin in Addis Ababa
grounded in truth. ●

ANANSI
Family time
for securocrats

Personal and
presidential
THE NATIONAL ELECTIONS
on 18 February were the closest
race that Uganda’s Yoweri
Museveni (aka M7) has run for
years. But he looked weirdly
energised by the experience, like
a gambler preparing to lay one
last big bet. At all times he was
surrounded by adoring members
of the first family, some of whom
firmly believe they are in the
queue to succeed him. It was also
M7’s most personal campaign.
Victory in the 18 February polls
is his membership card to the
‘three decades’ club, where
he will join Teodoro Obiang,
Robert Mugabe and José Eduardo
dos Santos. M7’s maiden speech
at the Organisation of African
Unity in 1987, at which he called
for sit-tight leaders to step down
immediately, seems aeons ago.

AFTER THE RESULTS, the next
questions for M7 relate to his
family. Will his super-ambitious
wife Janet finally persuade
him to hand over the reins?
Or will their son Brigadier Muhoozi
Kainerugaba, commander of
Uganda’s special forces, step
up again in the succession race?
But they cannot ignore the claims
of the security men, like police
chief General Kale Kayihura
and Lieutenant Gen. Henry
Tumukunde, who is in charge
of the ubiquitous ‘Crime Preventers’,
seen by the opposition as M7’s
stormtroopers.

Relentless Besigye
If marks were awarded for courage
and persistence, Kizza Besigye,
leader of the opposition Forum
for Democratic Change, would have
won the 18 February election in
a landslide. Formerly Museveni’s
personal physician, Besigye has
built a serious national organisation
despite intimidation and attacks.
He nearly lost his sight when
government thugs sprayed pepper

in his eyes in 2011. Talking to
Anansi on the campaign trail,
Besigye said the people had spoken
in what he called “massive national
rallies for change”. This year,
he insisted, “the country is ready
to defend its rights and justice.”

Mbabazi, the defector
FORMER PREMIER Amama
Mbabazi knows the inner sanctums
of the ruling National Resistance
Movement, which he served
for 25 years. That cut both ways
in his campaign as presidential
candidate for the Go Forward
Movement. “We have been singled
out for attack by the regime,”
he told Anansi, before describing
how Christopher Aine, his security
chief, had “disappeared after
clashing with state security”.
As a former insider, Mbabazi said:
“I know that Museveni’s genuine
support has been falling in election
after election, although they
have been suppressing the
opposition turnout.” He added
that the government’s ban
on cellphones at polling stations
was “an obvious attempt to
block accountability and fairness”
that would ultimately fail. ●
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COUNTRY FOCUS

Ghana & Côte d’Ivoire

ISSOUF SANOGO/AFP

Presidents next door
Ouattara and Mahama

A new wager
While a previous generation of political leaders
bet on which country’s economic model would
triumph, a new one is putting its money down in
support of regional cooperation and integration
By Patrick Smith in Accra and Baudelaire Mieu in Abidjan

THE AFRICA REPORT

•

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•

M A R C H 2 016

I

t was an encounter that defined the
region’s politics and diplomacy for
a generation. A month after Ghana
had proclaimed independence from
Britishcolonialrule,KwameNkrumah
flew toAbidjan toconvince Côted’Ivoire’s
leader, Félix Houphouët-Boigny, that
he should immediately push for total
liberation from the French colonisers.
“Your experience is rather impressive,”
came the courteous reply at that meeting on 7 April 1957. After wishing ● ● ●

Nkrumah “prompt and complete
success” with his project for a United
States of Africa, Houphouët ventured:
“You are witnessing the start of two experiments. A wager has been made between
the two territories, one having chosen
independence, the other preferring the
difficult road of building with the metropole a community of equal rights and
duties. Let each of us undertake his experiment and, in 10 years time, we shall
compare the results.”
There was no return match. A decade later, Nkrumah had been ousted in
a Western-backed coup and exiled to
Guinea. And Houphouët was presiding over an independent Côte d’Ivoire,
using French state and corporate funds
to build up commercial agriculture. Yet
the wager has intrigued Ghanaians and
Ivorians ever since, partly because there
is no agreed measure of success in the
contest. Now a new generation is making
another bet: can the two countries find
ways to build stronger economic and
cultural ties across the common border?
Véronique Tadjo, an Ivorian poet and
novelist, describes the change for The
Africa Report: “Perhaps we are getting
back into sync and thinking more about
our commonalities […]. For so long, it
seemed that when Côte d’Ivoire was
up and its economy was strong, Ghana
was in trouble with coups. Then Côte
d’Ivoire had its conflict, and Ghana came
up again.” Pushing for greater cooperation between the two states will not be
easy, warns Tadjo, but younger citizens
will be less hidebound by the historical
political differences and what she sees
as unnecessary linguistic divides.
●●●

Tamale

GUINEA

48

CÔTE D’IVOIRE CATCHES UP

Both tougher international economic
conditions and recent history could spur
onmorebilateralcooperation.AlainKouadio, vice-president of the Confédération
Générale des Entreprises de Côte d’Ivoire,
explains: “The Ghanaian economy was
attractive for several years while Côte
d’Ivoire was in crisis. Business start-up
procedures have been modernised in
Ghana.Duringthisperiod,severalIvorian
firms moved to Ghana to get tax benefits
as well as to benefit from the stability that
allowed them to draw up longer-term
development plans.”
Over the past five years since Alassane Ouattara was elected to the presidency in Côte d’Ivoire, its crisis-damaged
economy has caught up and overtaken
Ghana’s on some measures. This year,

Côte d’Ivoire’s economy is forecast to
grow at 7.1% and Ghana’s at 4.2%.
Like the other countries of the CFA
franc zone, Côte d’Ivoire benefits from
its currency’s peg to the euro. International pressures on other African currencies are rattling some Ivorian businessmen: “Volatility of the Ghanaian
currency against the dollar and the euro
is becoming very worrying. [Ghana’s]
energy problem also affects profitability,” says Jean-Luc Ruelle, chairman of
the Chambre de Commerce Européenne
en Côte d’Ivoire. Overall, Ghana still has
the bigger economy and population,
adds Ruelle: “The Ghanaian economy
developed substantially in recent years.
Growth was strong between 2006 and
2010, about 6.3%. With 27 million people,
Ghana is a potential consumer market.”
But alongside the expansion of the
market for consumer goods and services
in both countries, there is a vast potential
for cooperation on oil, gas and energy
projects. To make progress on that, the
two governments have to resolve the
dispute over their maritime boundary
(see page 52). Having launched largescale commercial oil production in 2009,
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GHANA - CÔTE D’IVOIRE | COUNTRY FOCUS

pipeline already goes through Nigeria,
Benin, Togo and Ghana. As Côte d’Ivoire
and Ghana speed up development of
their gas reserves, the plan is to make
the pipeline flow two ways so a regional
gas market can develop.
For Carius, these plans point to the
need for both countries to look at economic cooperation and diversification
in the wake of the downturn in commodity markets. “Côte d’Ivoire has been
diversifying over the past four years, so
its economy is proving more resilient
than Ghana’s to external market pressures […]. Both countries can do more
manufacturing and processing – not necessarily finished products but adding
more value to their commodities.”

There is vast potential for cooperation in oil projects
once the pair resolve their maritime border dispute

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according to Youssouf Carius, vicepresident of Bloomfield Investment
Corporation, an Abidjan-based ratings
agency: “There is a great advantage
in Côte d’Ivoire and Ghana working
together, particularly on gas. There is a
big demand for gas in Côte d’Ivoire so
the project to extend the West African
Gas Pipeline westwards from Ghana
makes sense.”
Progress has been held up by the complexities of harmonising the two countries’ regulatory frameworks. But this
should not be insurmountable, as the

GDP growth comparison (%)
15
12

14
Côte d’Ivoire

9
6

Ghana

3

SOURCE: WORLD BANK

Ghana has led the way with its Jubilee
fields and the Tweneboa, Enyenra and
Ntomme development further west, up
against the Ivorian border.
Côte d’Ivoire has been trying to make
upforlosttime.UnderPresidentOuattara
and oil minister Adama Toungara, the
country has revised its mining code and
determinedly pursued investment. Indeed, some companies such as Ireland’s
Tullow are investing in both countries,
which complicates the border dispute.
At one stage, Tullow tried to get a resolution at the heads of state level. Kofi
Annan, a former secretary general of the
United Nations, was also brought in to
try to broker a deal. But Fui Tsikata, an
adviser to Ghana’s legal team on the case,
which Accra has referred to the International Tribunal for the Law of the Sea,
says he doubts that it can be resolved
politically, despite the strong commercial pressures for a deal: “This year, both
sides are submitting their arguments and
responses, with hearings starting in the
first quarter of 2017, so a ruling can be
expected by the end of next year.”
Once that is resolved, there are good
opportunities for energy cooperation,

PHOTO COURTESY OF XPD8 SOLUTIONS

SHIFTING TRADE BLOCS

0
-3
-6

-4.4
2010

2011

2012

2013

2014

Much of Côte d’Ivoire’s regional trade
is with Burkina Faso and Mali, says
Carius: “There’s definitely plenty of
scope for reciprocal trade in products
and services with Ghana.” Although
Côte d’Ivoire’s membership of the CFA
franc zone provides some resilience to
international pressures, Carius suggests
reform will be necessary in the longer
term: “The arrangement gives European
companies a commercial advantage in
the CFA markets, which is not enjoyed
by Asian or US businesses […]. It also
complicates trade with other non-CFA
zone West African economies.”
Although a common West African currency is still some years away, bankers
in Côte d’Ivoire and Ghana are working
on new financial instruments to simplify crossborder trade. For example,
the Ghana Stock Exchange is working to facilitate transactions across the
eight-member regional bourse based
in Abidjan. “Despite economic difficulties and the depreciation of the cedi.
the Ghana bourse is very dynamic and
innovative, regularly introducing new
products,” says Edoh Kossi Amenounve,
director general of the Bourse Régionale
des Valeurs Mobilières in Abidjan.
Last year, the Ghana Stock Exchange
launched the Ghana Fixed Income Market, which operates across the regional
markets, both Francophone and Anglophone: “Together we will be strong. We
have had an agreement with the bourses
of Ghana and Nigeria since July 2015,”
adds Amenounve.
But there are a host of other trading issues yet to be resolved. Because the duty
on imported rice is much lower in Côte
d’Ivoire, there are lucrative smuggling

49

50

COUNTRY FOCUS | GHANA - CÔTE D’IVOIRE

operations into Ghana. It has been costing the government in Accra around
70m cedis ($17.7m) a year in lost duties,
according to ace investigative reporter
Anas Aremeyaw Anas.
Such smuggling operations raise bigger questions of security and diplomatic
relations, according to Kwesi Aning, the
director of the Kofi Annan International
Peacekeeping Training Centre: “There
have been mutual suspicions [between
Yamoussoukroand Accra], whichhaven’t
helped security cooperation, but we now
face increasing regional threats after the
attacks in Bamako and Ouagadougou
[…]. The different governments have to
do much more together.”
DEBATE, 60 YEARS ON

For Aning and other analysts in Accra,
many of the dysfunctions in relations
today have their roots in decades-old
political arguments. Debates over founding leaders’ strategies rumble on. In economic terms, Houphouët’s state backing
for cocoa and coffee plantations yielded
an average economic growth rate of 7%
between 1960 and 1980. Nkrumah’s focus
on state-financed industrialisation was
accompanied by a fast-growing public
service and high export taxes. Nkrumah
also introduced free universal primary
education in 1961, partly to provide literate workers for industrial projects.
Each choice created its own political
economy. Houphouët’s bet on commercial agriculture made his country the
biggest cocoa producer in the world,
but his policies favoured the growing
regions in the south and exacerbated
inequities in the north. And political
cohesion came under pressure after the
commodity price crash in the 1980s, and
more so a decade later.
Political fissures appeared in Ghana
much faster. Nkrumah combined his
dirigiste industrial schemes with strong
ties with the Soviet Union and China,
infuriating US and British officials fighting the Cold War. The coup against
Nkrumah sparked two decades of instability. Ghana’s economy, snagged by
mismanagementandcorruption,hitrock
bottom by the early 1980s and the International Monetary Fund was called in.
Today, after the years of economic
and political convulsions, Côte d’Ivoire
and Ghana are seen as two of the most
resilient countries in the region. After
that legendary wager 60 years ago, their
peoples appear drawn more to cooperation than competition. ●

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COUNTRY FOCUS | GHANA - CÔTE D’IVOIRE

52

PEOPLE TO WATCH

Diplomats, oil men and
cross-border business leaders

Top legal minds are working for both governments to find a solution to the
border dispute, while the authorities debate economic cooperation, and business
executives develop West Africa’s economic fabric

N

In that conflict, many backers of former
President Laurent Gbagbo sought refuge
in Ghana. In 2013, Justin Koné Katinan
(2), who was once Gbagbo’s spokesperson, won his case in the Ghanaian
courts not to be extradited back to Côte
d’Ivoire. Blay is seeking to allay fears that
Katinan will cause trouble for the current
Ivorian administration and stresses that
Katinan remains in Ghana on the basis
of humanitarian principles.
BORDER TALKS

Blay’s Ivorian counterpart, Bernard
Ehui Koutoua, was appointed in 2011
after spending 12 years in exile following a coup in 1999. Ehui Koutoua held
a number of positions in President Félix
Houphouët-Boigny’s government and
is now ambassador to both Ghana and
Togo. Since taking up the role, he has
facilitated the return of Ivorian civilians
who fled the country during the fighting
in 2010. He has also called for a peace-

ful solution to the countries’ unresolved
border issues, noting that Ghana and
Côte d’Ivoire must not squabble as was
the case between Nigeria and Cameroon
over the Bakassi peninsula. He says there
is a great deal of room for collaboration
and joint management along the border
when it comes to both oil and cocoa.
The border dispute has been a thorny
issue in the countries’ bilateral relations,
but high-level dialogues and the involvement of international bodies suggest that
the two countries are committed to the
peaceful resolution of problems around
undemarcated borders. The maritime
case, which the Ivorian authorities raised
in2010,isnowinfrontoftheInternational
Tribunal for the Law of the Sea (ITLOS).
Heading Ghana’s legal team is justice
ministerMariettaBrewAppiah-Oppong
(3). Ahead of the April 2015 ruling that
saw the ITLOS throw out Côte d’Ivoire’s
petition to stop all activities in the disputed area, Appiah-Oppong ● ● ●

2

THEOPHILUS FORSON/TRU LENS

1

CHRIS STEIN/AFP

FH COMMUNICATIONS BUREAU

eighbours and members of the
Economic Community of West
African States (ECOWAS), Côte
d’Ivoire and Ghana have generally good
relations and the occasional spat. The
countries’ diplomats are in regular
contact, and their business leaders
are scouting across both sides of the
border in the search for profits and
new opportunities.
The day-to-day relations between
Accra and Yamoussoukro are handled
by the country’s ambassadors. Ghana’s
ambassador to Côte d’Ivoire, Lieutenant
General Peter Augustine Blay (1), is
very familiar with the politics of his host
country. As Ghana’s chief of defence staff
between 2009 and 2014, Blay oversaw
the sending of Ghanaian United Nations
peacekeepers to Côte d’Ivoire following
the 2010 post-election crisis.

3
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COUNTRY FOCUS | GHANA - CÔTE D’IVOIRE

not mean that he sees his country as
● ● ● argued that Ghana has a lot more
to lose in this case than Côte d’Ivoire,
in conflict with Ghana. The oil specialgiven the investments that have already
ist, who graduated from the University
been made in oil blocks in the area. She is
of Southern California, has a good rejoined by British-French lawyer and prolationship with Emmanuel Buah, his
fessoroflawPhilippeSands.OthermemGhanaian counterpart, even though he
bers on the Ghana legal team include adrejected Buah’s attempt to have the provisers and specialists from the ministries
posed border trace the path of current
of energy and finance and
the Ghana National PetroThe Ivorian ambassador to
leum Corporation.
Ghana says there is room for
After being sacked from
cooperation on oil and cocoa
his post as group chief executive of Togo-based Ecooil permit lines. The two negotiating
bank in 2014, Thierry Tanoh (4) joined
teams will face off once again in front
the team working for President Alassane
Ouattara. As deputy secretary general
of Algerian judge Boualem Bouguetaia
of the presidency, Tanoh leads Yamin Hamburg in March.
ECOWAS regulations facilitate regional
oussoukro’s border negotiations with
Ghana alongside oil and energy minister
trade, and Ghana and Côte d’Ivoire have
Adama Toungara (6). They are backed
many similarities in terms of economic
by national oil company director general
strengths, which include agriculture,
Ibrahima Diaby, Ivorian lawyer Adama
mining and growing manufacturing secKamara and several France- and United
tors. For now, the number of investors
States-based advisers. Tanoh, who has
pursuingcross-borderdealsfavourscompanies from Côte d’Ivoire.
the backing of Ouattara, has made several trips to Ghana to seek a consensual resolution of the border problem in
DEALMAKING
parallel with the ITLOS case. A trained
In his office located in East Cantonment
in Accra, Ivorian businessman Charles
economist and accountant, Tanoh was
previously the vice-president of the InKader Gooré (5) holds meeting after
meeting with his employees and partternational Finance Corporation and
knows the Ghanaian authorities well,
ners whenever he is in the Ghanaian
capital. His top priority is jump-starting
as he helped the government to attract
investment when he occupied that post.
the stalled talks on the construction of
Toungara wants to protect his couna thermal power plant with the capatry’s interests at ITLOS but that does
city to produce 450MW in the region of

Takoradi. Kader Gooré’s CKG Energy has
only recently relaunched negotiations
with the Ghanaian government. An initial
phase of the project that would produce
150MW was due to start construction
in 2014 but talks fell apart about the
price of electricity that the state would
pay. The structure of the proposed deal
is a $550m build, operate and transfer
contract for a 20-year period. The plant
has the backing of Omani investors, and
Kader Gooré is the West African representative of Oman’s Public Authority for
Investment Promotion and Export Development. If the power-plant deal is
successful, Kader Gooré and his partners
could develop a fertiliser plant in Ghana.
He is also lobbying for Oman Air to make
Accra its West African hub.
One of Côte d’Ivoire’s leading agribusinesses is also active in Ghana. Groupe
SIFCA–whichwasrunbycommerceminister Jean-Louis Billon until he took up
his government post and is now chaired
by his brother, Pierre Billon – is active
in the sugar, rubber and palm-oil sectors
at home. Across the border, SIFCA owns
Ghana Rubber Estates Limited, the West
African leader in the production of granulated rubber, which has been run since
2011 by Lionel Barre, a Frenchman who
got his start in the sector in Brazil. ●
Baudelaire Mieu in Abidjan and
Billie Adwoa McTernan in Accra

VINCENT FOURNIER/JA

54

4

THIERRY GOUEGNON/REUTERS

BRUNO LEVY FOR JA

5

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AGRICULTURE Peace, love and cocoa
With the return to stability
in Côte d’Ivoire cocoa
smuggling is down, but
that’s not the only reason
Ghana’s producing less

terms of their production
levels. Côte d’Ivoire’s annual cocoa harvest has
risen to about 1.8m tonnes
since the 2013/2014 season. On the other hand,
Ghana’s smaller and smaller harvests are due in part
to the ageing of the country’s trees, which have not
been regularly replaced.
Farmers are getting older
too – the United Nations
Development Programme
estimates that the average cocoa farmer is more
than 50 years old – and few
young people are getting
involved in the sector.

I

FRANCK AKPOUE FOR JA

n the lead-up to national chocolate day
– otherwise known as St. Valentine’s
day – the number of traders hawking
the Ghana-made Golden Tree chocolate for lovers and hopefuls on the streets
of Accra increases. The same cannot
be said for the amount of cocoa being
produced by farmers, as figures have
slid since the 2011/2012 season, when
Ghana produced 860,000tn. In 2014/2015
the country produced about 90,000tn
less than that, according to data from
Ecobank. Analysts attribute the decrease
SMALL IS VULNERABLE
to a number of factors, including bad
Ghana and Côte d’Ivoire
weather and smuggling.
have almost the same
Since the return of stability in Côte
amount of cocoad’Ivoire after the 2010 conflict around
producing land – roughly
1.7m hectares – and former
the presidential election, the governCocobod director Osei atment has done much to fight against
tributes Ghana’s generally
smuggling of Ivorian cocoa into Ghana,
lower production figures
Both countries wish to go from exporting
which is said to have been responsible
to the scales of farming.
the raw cocoa to processing it themselves
for Ghana’s high production statistics.
Ghana’s farmers generPresident Alassane Ouattara’s governstill possible that Ghanaians are coming
ally operate smallholder family farms,
ment wants to strengthen its finances
to sell their harvests in Côte d’Ivoire.”
while Côte d’Ivoire has many large-scale
by being sure that it can buy all of the
Some Ghanaian officials see the smugcommercial plantations. Osei says there
cocoa grown by local farmers.
gling issue from a different point of view.
are few Ghanaian farms in excess of 20
There is no longer the same buzz
Isaac Osei, the former head of Ghana’s
acres (8ha). The difference in size means
of activity during the cocoa season in
government-run cocoa body, Cocobod,
if a small-scale farm in Ghana is infected
the eastern Ivorian border regions of
Abengourou, Agnibélékrou and Aboisso.
says that smuggling is not really a probwith a crop disease, the farmer is likely
Bilé Bilé, the leader of a farmers’ organlem. He explains: “Every farmer or every
to lose out on the whole year’s producbuyer is an economic animal. Sometimes
tion, whereas on the larger farms in Côte
isation who is managing the campaign
to reinvigorate production in the region
when we look at smuggling, we look at
d’Ivoire the infection can be contained.
says: “Prices are very good. There is no
it as if it is something bad. But it’s really
Osei argues, too, that Ghana would
benefit greatly from an expansion of colonger a need to cross the border to go
a question of relative prices.” He adds:
sell in Ghana, thanks to the restructuring
“Also there are many farms in no-man’scoa processing if it capitalised more on
of the cocoa sector.”
land between Ghana and
domesticdemand. TheCocoaProcessing
Cocoa production
Côte d’Ivoire. It is blurred.
Company – where Golden Tree products
The Ivorian customs
2014-15 season
are produced – has been struggling with
People will naturally go to
authorities estimate that
(1,000s of tonnes)
where they will find ready
the cost of production, as it mainly exbetween 100,000 and
cash or more money. I
ports its cocoa-derived products, and
150,000tn of cocoa are
1,720
don’t think one should
shut down temporarily in late January.
smuggled into Ghana
With Abidjan attracting investment in the
spend resources trying to
each year. But a new customs unit now patrols the
form of a chocolate factory from French
put barrier measures in
border to fight against
place to stop people from
chocolatier Cémoi in May 2015, the comdoing that. They are only
petition has started in earnest between
these trade flows. A cus810
toms official in the border
acting on their own ecothe neighbouring producers to seize a
town of Niablé says there
nomic instincts.”
share of local and regional markets. ●
Baudelaire Mieu in Abidjan and
is no longer any smugThe two countries also
Billie Adwoa McTernan in Accra
gling to Ghana, “but it is
seem to be diverging in
Côte d’Ivoire Ghana
SOURCE: STATISTICA

56

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Bringing West African food to the world
Homefoods Processing and Cannery Limited (HFPCL) is a food processing and agro-foods export
company. For twenty years, HFPCL’s core business is the exporting of West-African food ingredients to
Europe, United Kingdom, Switzerland, Italy, North America, The Gambia and Equatorial Guinea.
Our traditional products include:

Homefoods brings “Natures Best
Collections” Ready-To-Eat Meals of
West African taste to the world. It is

Akosombo Dam on Lake Volta,
Ghana. Côte d’Ivoire has been
exporting power to its neighbour

ALESSANDRO COSTA

58

ELECTRICITY

Cooperation to fight crises

predicted in the medium term, not least
because a number of outstanding procurement contracts have yet to be executed by exploration companies.
There is still optimism for the sector,
though. Amin says: “Although Ghana has
relatively modest levels of oil production, it is well positioned in the region
to become the petrochemical hub […].
It can also become the service hub of the
region, where oil service companies station in Ghana and move between Ghana
and Nigeria, Côte d’Ivoire, Sierra Leone
and Liberia […] because of our relative
stability but also being in the centre of
all of these countries. Ghana can take
advantage of that if we are able to build
the necessary infrastructure.”
GOOD RELATIONS

Côte d’Ivoire’s oil sector is much smaller
than Ghana’s, and the government there
is also focusing a lot of its attention on
Joint projects could help boost regional
the need for electricity. The launch of
the 139MW Azito 3 power station north
interconnectivity and allow Ghana to meet production
of Abidjan in June 2015 brought the
shortfalls until its new projects come on line
country’s electricity production capacity to 1,772MW. Côte d’Ivoire’s politven though Côte d’Ivoire lags
fallen since the end of the 2015. Amin
ical instability after the troubled 2010
behind its neighbour in elecsays that Ghana’s peak demand can
presidential election has led to less intricity production, the Ivorian
reach 2,300MW but is currently around
vestment in new projects.
Ivorian President Alassane Ouattara’s
1,800MW, a reduction that he says comes
government is supplying electricity to
government plans to boost production
blackout-prone Ghana. The energy crisis
from a slowdown in industry.
overthepastthreeyearsandthedoubling
to 4,000MW by 2020 and will continue
The International Energy Agency esof Ghana’s utility tariffs in January have
timatesthat72%ofGhanaianshadaccess
to supply Ghana with power. Oil and
raised the cost of doing business, causing
to electricity in 2013 while only
energy minister Adama Toungara tells The Africa Report: “We
somesmallenterprisestocollapse.Others
26% of Ivorians did. NonetheNational
have very good relations with
have been looking west to Côte d’Ivoire
less, Ghana has been importing
electrification
Ghana.Weexportseveraldozen
powerfromCôted’Ivoiretohelp
for brighter pastures.
rate (2013)
megawatts per year to Ghana.
meet its shortfalls. In December,
The head of the Association of Ghana
Côte d’Ivoire
Everything is decided between
Industries (AGI), James Asare-Adjei, says
Ghana imported 250MW from
President Ouattara and his
the AGI is counting the number of comCôte d’Ivoire. As the country
panies that have moved their operations
enters an election year, Amin arcounterpart John Mahama.”
to Côte d’Ivoire. And it is not just local
gues that the move is unlikely to
Chronic gas-supply defibe just a short-term remedy and
manufacturers that are looking west.
cits from the West African Gas
Ghana could well continue to
Mohammed Adam Amin, the executive
Pipeline Company are part
director of the Accra-based think tank the
turn to its neighbours for relief
of Ghana’s energy problems.
Africa Centre for Energy Policy (ACEP),
as it tries to stabilise the energy
Ghana and Côte d’Ivoire are
saysthatsmallcompaniesarenottheonly
sector with various expansion
working together on projects
Ghana
ones toleave: “Anumber of oil companies
projects and new developments
to address this issue. One poshave decided to move to Côte d’Ivoire to
– fiscal and physical – over the
sible deal would lead to the
set up their head offices there.”
next five years.
extension of the West African
The electricity situation in Ghana is
Ghana’s ability to be more
pipeline to the Ivorian city of
slowly improving. In November 2015,
self-sufficient in electricity
Assinie, not far from several
the 225MW Turkish Karpower barge
production depends on the
gas deposits. ●
Baudelaire Mieu in Abidjan
arrived in the country, seven months
activities of its oil and gas secand Billie Adwoa McTernan
later than planned. Despite its installtors. Ghana’s prospects for oil
SOURCE: IEA
in Accra
ation, the country’s peak demand has
production are not as high as

E

26%

72%

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hana’s banks are preparing for
trouble as oil prices remain low
and the electricity crisis continues, but Côte d’Ivoire’s are set to keep
growing on the back of the economy’s
post-conflict boom. In Ghana, the level
of non-performing loans (NPLs) has
been rising since 2014, from 11.2% in
December to 14.1% in November 2015.
A number of foreign banks, like
For their part, Ivorian banks have been
Ecobank, have a presence in both
attracting international investment, and
Ghana and Côte d’Ivoire
the sector could receive a boost as the
government follows through on its oftgovernment. Analyst John Opoku, who
delayed plans for privatisations.
specialises in banking in the Economic
The Africa Report’s Top 200 banks
Community of West African States, tells
ranking (TAR Finance Edition, OctThe Africa Report: “I am confident that
Dec 2015) shows that Ghana and Côte
going forward NPLs will rise [...] in 2016
d’Ivoire’s banking sectors are fairly
due to slower gross domestic product
growth and a weaker commodity sector,
matched. Each had eight banks in
particularly in oil and mining.”
the Top 200. Ivorian banks, with total
assets of $9.3bn, were just
The Monetary Policy
ahead of Ghanaian banks,
Committee of the Bank of
with $9.2bn. Although the
Ghanarecentlymaintained
country’s asset bases are
its tight stance in order to
Ghana
similar, Ivorian banks in
help the economy onto a
the Top 200 devoted more
firmer footing by keeping
Côte d
money to loans – $5.2bn
its policy interest rate at
’Ivoire
in 2014, compared with
26%. It cited the slower
Ghana’s $3.8bn – and had
pace of price changes
higher deposit levels –
and its desire to steer in$7bn over the same period,
flation down towards the
compared with $6.1bn.
medium target band of
Number
around 8%. Banks have
of people aged 15
or over with a bank
UPS AND DOWNS
reacted by holding back
account
The region’s banks are now
on lending, with growth
SOURCE: WORLD BANK (2014)
heading in different direcof credit to the private sector dropping from 26.6% in
tions. In Ghana, the cedi’s
depreciation, the government’s recourse
September 2014 to 3.6% in September
to an International Monetary Fund bail2015, according to the Bank of Ghana.
out and low prices for oil and gold exAcross the border, the Ivorian government is in the midst of a privatisation
ports all create a gloomy picture. The
campaign for troubled state-owned
global ratings agency Moody’s downgradedleadinglocallyownedGCBBank’s
banks. It announced its intentions to sell
deposits and gave it a negative outlook
its 67% stake in Versus Bank for €47m
in 2015 because about half of its assets
($52.8m) in 2015 but has made little
are tied up in loans, treasury bills and
progress in finding a buyer. The next
other instruments linked to the central
bank on offer is Banque de l’Habitat
OLIVIER FOR JA

60

40%

34%

de Côte d’Ivoire, which specialises in
mortgage lending and is owned 55.9%
by the state. With the sale, the government wants the financial institution to
become a universal bank.
Private sector banks have been better
at attracting investment, especially from
abroad. In March 2015, Amethis Finance
and Canada’s Banque Nationale bought
a 21% stake in Groupe NSIA, which in
addition to its insurance business also
includesNSIABanque,formerlyBIAO-CI.
There is little banking cooperation and
cross-borderinvestmentbetweenthetwo
West African neighbours. None of the top
banks majority owned by local interests
– GCB Bank and NSIA Banque – have operations in the other country. Most of the
banks with operations in both countries
are subsidiaries of major African banks
or their European competitors. They
include Togo-based Ecobank, Nigeria’s
United Bank for Africa (UBA), France’s
Société Générale and Mali-based Bank
of Africa. Over the past several years,
Nigerian banks – like Access Bank and
UBA – have had more success in Ghana
than in Côte d’Ivoire because of management problems and weaker ties between
Nigeria and Côte d’Ivoire.
There is still huge potential for banking growth in both countries. According
to the World Bank’s Financial Development Database, there were just 470
deposit accounts in commercial banks
per 1,000 people in Ghana in 2013 and
197 per 1,000 in Côte d’Ivoire. ●
Masahudu A. Kunateh in Accra
THE AFRICA REPORT

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62

COUNTRY FOCUS | GHANA - CÔTE D’IVOIRE

OPINION

Franklin Cudjoe

Chief executive officer, IMANI Center for Policy and Education

Ghanivoire could weld
together West Africa

A

s the fireworks explode in clusters
over the lagoon in Abidjan, the great
grandchildren of independence-era
leaders Kwame Nkrumah and Félix
Houphouët-Boigny clink champagne
flutes and move to the dance floor. Across the other
side of the ceremony hall, the ink is drying on a
document that dissolves the borders between the
two countries. Côte d’Ivoire and Ghana are officially one country. Visiting dignitaries applaud
from surrounding tables.
This imaginary scenario should make Ghanaians
happy. Côte d’Ivoire, our neighbour to the west, recovering from a dreadful war, could this year grow its
gross domestic product by almost 9%. Meanwhile we,
relatively stable for more than 30 years, will be growing
at less than 4%. Côte d’Ivoire, Togo, Benin, Senegal
and the Democratic Republic of
Congo were included
in the World

Bank’s 2015 list of top 10 reforming countries for
business competitiveness, but Ghana was missing.
Assuming a hypothetical scenario in which people
and goods could cross freely between Ghana and
Côte d’Ivoire, many revolutionary things would be
possible. A domesticated global centre for cocoa
would come with the ability to determine prices
and control production – creating an OPEC of cocoa, COCOPEC. This could leverage the ability of
the two powerhouses to attract investment in processing plants, with significant opportunities for
job creation. Whereas both countries dominate
what is estimated to be a $9bn-per-year industry,
a new joint country could make giant strides into
the high-end chocolate industry, which is estimated
to be worth $87bn a year. This would lead major
players such as Mars, Nestlé and Cadbury to
relocate some of their production facilities
from North America and Europe.
Embarking on this value-addition
drive, as opposed to being mere
suppliers of both primary and intermediate products of cocoa,
would require a larger consumer market. As West
Africa’s second- and thirdlargest economies and with
burgeoning middle classes,
Ghana and Côte d’Ivoire together could exploit their
growing consumption of
chocolate to attract investment in this segment of the value
chain, as well as sell
to the Nigerians.
Next, we could become a regional powerhouse for energy production,
distribution and marketing. Both countries are already making huge public investments in energy infrastructure. And with
large deposits of oil and gas, there is an op- ● ● ●
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64

COUNTRY FOCUS | GHANA - CÔTE D’IVOIRE

● ● ● portunity for expanding manufacturing and
port facilities to handle cargo for landlocked neighbouring countries. Côte d’Ivoire has West Africa’s
most reliable energy infrastructure and has set its
sights on increasing production to export to countries such as Guinea and Sierra Leone. Ghana has
similar ambitions.
The net effect of reliable power
supply – not only for increasing domestic demand but also for export
to other West African countries – is
that the duo could be the energy
hub for West Africa. This obviously
would have an effect on investment
and subsequently industrialisation.
It promises to place these fused two
countries at the epicentre of economic activity within West Africa,
just like South Africa is the bedrock
of Southern Africa.

We could also create a financial services hub to rival South
Africa’s. Côte d’Ivoire is back to
becoming the most favoured
destination for multinational
and supranational financial institutions, with a regional bourse
and regional central bank. Meanwhile, Ghana is
perfecting the art of providing unique financial
services to English-speaking West Africans.
The growth of the two markets could mesh with
Nigeria’s relatively deeper financial sector, which
provides tremendous opportunities for growth and
development. The creation of a sub-regional bond
market, for instance, could provide governments
and businesses with significant funds to undertake infrastructure projects. The success of such a
measure would also benefit smaller West African
countries that are otherwise not able to participate
in international bond markets. A well-integrated
financial system between the two countries would
boost trade and economic activities.
Cultural exchanges through language, music
and food would not only provide economic returns
through tourism but also serve as the basis for a
special relationship that guides the resolution of
disputes. Such a cultural exchange already exists
to a large degree between Nigeria and Ghana, with
Ghana seen as Nigeria’s little brother, and this has
had enormous benefits to both countries. As the
citizens of Ghana and Côte d’Ivoire become even
more integrated, this would guide policymakers
in their decisions relating to each other.
The benefit would extend to the entire Economic Community of West African States (ECOWAS), as the union between these two countries
could help bridge the Anglo-Francophone divide
in the sub-region. Acting as a venue where the
French-speaking and English-speaking countries
of Africa could meet and discover each other, the
newly combined Ghana/Côte d’Ivoire could also

finance these matchmaking transactions, a potentially huge new source of growth.
In particular, the new country could help the
ECOWAS sub-region speak with one voice. It would
provide leverage for countries – including the regional powerhouse Nigeria – that have relatively
developed political and democratic institutions to
press other West African states to adopt additional
democratic and good governance principles.
The integration of these two countries could also
bind Nigeria into ECOWAS more firmly, which is
one of the key issues facing West Africa. While it
represents 77% of ECOWAS gross domestic product,
Nigeria does not trade much
with its neighbours – something
a new Ghana and Côte d’Ivoire
would help to fix. For all this to
happen, however, there would be
much work to be done.
First, a head count. Politicians believe in the numbers game and swear
by any means to ensure the right numbers are voting for them. This would
mean that only eligible citizens of a
country should in fact vote for a leader.
So, even if borders as we imagine them
here are virtual, identifying legitimate citizens would not be subject to
any negotiation. This means that Ghana, for example, would be jolted into making sure the issue
of identifying every Ghanaian becomes not just a
technology issue but a development one, as public services and foreign direct investment would
have to be based on credible statistics.
A second area of attention would have to include
real attempts at devolution to soften the blow for
two sets of national leaders who would necessarily
cede power in a new configuration. Ghana and Côte
d’Ivoire operate presidential systems of government
with a very powerful presidency usually aided by
a majoritarian parliament, creating a very centralised state that feeds on patronage and cronyism.
Finally, this imagined, new West African state
would require a transformed public service. The

The union could help bridge the AngloFrancophone divide in the sub-region
disproportionate balance between politics and
policy – with the former dominant at almost all
levels of government in Ghana and Côte d’Ivoire –
means that the current speed of public-sector
reform is dramatically and frighteningly slow.
This deters our progress towards the objective of
becoming upper-middle-income economies. We
will need to see growth in overall national capacity, and that national capacity must be anchored
on a public sector with a strong attitude in support of reform and without the long, invisible but
debilitating arm of politics. ●
THE AFRICA REPORT

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D E A L I N G I N P HY TO S A N I TA RY P R O D U C TS, I N I R R I G A

A leader in local sales
of phytosanitary products
economy, at the National Polytechnic Institute inYamoussoukro, Côte
d’Ivoire, in 2003.
I have ten years of professional
experience in top management
positions with a number of organisations in Côte d’Ivoire.

How did the idea to create
your own business come to
you?

ADVERTORIAL

Mr. Arman Konan, managing director.

AGRITEC, an Ivorian
company based in Abidjan,
is a dealer of agricultural
products, particularly
fertilisers, insecticides,
fungicides, herbicides,
growth regulators,
production aids and a
wide variety of farming
equipment. AGRITEC,
a leader of distribution,
is active in every major
agricultural region of
Côte d’Ivoire through
its network of 40 sales
outlets and is applying for
the ISO 9001 certification
(2008 version).

“Only those who do nothing
make no mistakes.”
Fears of failure and of stepping
into the unknown are the two
main roadblocks for the majority of
project leaders.When we launched
Agritec, we experienced many worries and many doubts about the
survival of the business, especially
during periods of financial tension.
But we believed in it every step of
the way. Anything is possible when
you believe in it!

What is your educational and
professional background?
I am an agronomic engineer. I
completed a degree in advances
agronomics, specialising in agro-

During my engineering studies, I held a number of management positions within the
assoc iation groupi ng Côte
d’Ivoire’s top schools. During my
final term, I worked with some
friends on the executive board
to launch two big projects:
The first consisted in inviting
the African intelligentsia, of which
we were part, to build an awareness of our responsibility for our
continent’s future. We sought to
promote leadership in every sector in which would be working
through actions designed to boost
the development of our continent.
The aim of the second project
was to encourage graduates of the
country’s top schools to embrace
the concept of entrepreneurship.
At that stage of our lives, we were
convinced that building a strong

TION SYSTEMS AND AGRO-PROCESSING EQUIPMENT

nation meant boosting private
initiatives. We also shared the idea
that the path to social and financial
success was to be found in running
our own businesses.
Through these ventures, it was
clear in my mind that I was going
to become a businessman.
Going forward, my professional
life has been about seeking the
best business ideas while also taking care to stick to small budgets.
Working with a business partner, I made my first attempt in
2008. Even though it ended in failure, it also did nothing to change
my ambitions.
Everything fell into place during
my last management position,
when I was director of a phytosanitary firm. I saw an opportunity
and knew I had a good chance in
the sector. Without hesitation, I
resigned from my position to start
Agritec with my current partner.

“Think Africa’s Future”
and “SME Initiative”
open every step of the way. This is
very important for your image.

What advice would you give
a younger person looking to
get started?
I would simply say that anything
is possible if you believe in it. You
do not need to be born with a
silver spoon in hand to succeed
in the business world. Never
hesitate when the feeling is right.
The hardest part is taking the first
step, passing from words to action.

What are your plans for the
future?
Our ambition is to double our
activity for the fiscal year 2015
and, above all, to meet our goal
of becoming the leading local distributor of phytosanitary products
in Côte d’Ivoire.
With the help of partners, we
are also preparing to build an ultramodern production facility for
phytosanitary products. Related
to this, we are studying every opportunity to bring new partners
into the ownership of the facility.

First of all, one must believe
in the enterprise. As the saying
goes, “no one will believe in your
business more than you.” When
you believe in your project, you
give yourself the means of reaching your goals. Above all, being a
businessman means knowing how
to take calculated risks.
Keeping your word is key. Of
course, for an SME, it is difficult to
meet every deadline and every
condition 100 percent of the time.
But the most important thing is to
honour every engagement sooner
or later, and to keep the lines of
communicationwiththeotherparty

This year’s Africa CEO Forum, to be held
in Abidjan on 21-22 March, will examine
the prospects for a new generation of
continental champions. The Africa Report
talks to business leaders about
obstacles and strategies for success
By Emilie Filou

fter a day and a half
of high-level discussions at an Africa
investment conference, Arnold Ekpe,
non-executive chairman of financial services holding firm Atlas
Mara and former chief executive
of Ecobank, sounds slightly exasperated. “African countries are not
doing enough for themselves,” he
says. “I have been going to conferences like this for 20 years. We
have to move from talk to action.”
An elite band of companies
are doing just that – with a toolkit
that helps expand their operations
across African borders. But Ekpe
argues that Africa needs many
more champions like Dangote
Group, MTN and ShopRite.
Aliko Dangote, the founder of
the Dangote Group, also regularly
bemoans the lack of inter-African
business activity. He too told the
assembled investors: “We need to
develop like China or Japan did.
They created wealth themselves.”
That is easier said than done.
Many of Africa’s 54, often small,
countries, lack the skills and resources of sizeable countries such
as China. Intra-continental trade
also accounts for just 12% of total
trade in Africa. This is low by global
standards, even acknowledging
the fact that it does not account
for informal trade. Africa’s statistics
hide regional differences too: East
African countries do more trade
between themselves than their
southern or western neighbours.
The reality is that for the likes
of Dangote, investing in Africa
is not easy. Terence McNamee,
deputy director of the Brenthurst

Foundation, says there are many
stumbling blocks: “There is a facile impression that cultural affinity – the ‘Africanness’ of a company – would count for something
across borders, whereas it is not
really the case. Very often, it [is]
even the opposite.”
TRADE BARRIERS

The reasons for the low level of
intra-African trade and investment
are numerous. They include poor
infrastructure, tariff and non-tariff
barriers, a lack of financing (see
box), currency controls and restrictivevisapolicies.Cementmagnate Dangote points out that as a
Nigerian, he would need 38 visas
to visit all 54 countries in Africa,
substantially more than if he held
a United States or British passport.
The picture is just as depressing
for goods: it takes anywhere from
nine to 17 days to move freight just
1,000km from Tema in Ghana to
Ouagadougou in Burkina Faso.
Studies have also found that a container spends on average about 16
days in African ports, compared
with three or four in most other
international ports.
What is galling, explains Ekpe,
is that little has been done over
two decades to overcome these
barriers. “What we need is free
movement of people, a free trade
area and free convertibility of currencies,” he says. “It’s nothing new.”
The reason it is not happening is
fear – of surrendering power, of beingswallowedupbyamorepowerful neighbour and of people being
displaced by foreigners. This overrides any notion of pan-African
solidarity, says McNamee. “With

69

BUSINESS | COMPANIES & MARKETS

the exception of the East African
Community(EAC),therhetoric[on
regional integration] is way ahead
of the reality on the ground. I think
a mindset change must occur.”
Ekpe concurs. His first challenge
when he became chief executive of
Ecobank in 2005 was to convince
the board to embrace the concept
of building a pan-African bank.
“They liked the idea. They just
didn’t think it could be done,” he
recalls. But progress is being made.
Through improving infrastructure
and border processes the EAC has
reduced the time it takes to get a
container from Mombasa to Kigali
from 26 days to just five.
PRIVATE SECTOR GROWTH

Governmentsmustalsoencourage
private-sector growth if they want
to nurture more African champions, argues McNamee. He says
they should focus on improving
the conditions for doing business
rather than trying to get involved in
every sector. Andrew Alli, chief executive of the Africa Finance Corporation, agrees: “Governments
hold on to projects such as airports, ports and power generation
because of national pride and security concerns, but they should
push more projects into the private
sector. There is so much to do.”

So how have African champions been succeeding? It comes
down to understanding the local
context. Gavin Dalgleish, managing director of South African
agribusiness Illovo, explains: “In
Africa, you take a one-continent
approach at your peril.” Illovo has
developed processing operations
in six countries, and Dalgleish says
that the key to their success has
been immersing themselves in
each market. “You try to develop
a local flavour to your business
rather than continue to be a South
African company,” he says. “In
Zambia, for instance, no one talks
about Illovo. It’s Zambia Sugar.”
This commitment to markets
involves a range of instruments:
minority shareholding, employing
local staff, contracting local service
providers and following national
agendas. “In Malawi, food security is a big issue so we got behind
initiatives to grow maize. In Zambia, the key thing was developing local supply chains,” Dalgleish
adds. This is especially important
to overcome ‘legacy perceptions’
about South Africa. “We’re not always the most popular investors
on the continent,” he says.
Stereotypes are a recurrent
theme in studies: South Africans
are perceived as arrogant and

Nigerians as unreliable. And while
West Africans tend to associate
local goods with poor quality, in
EastandSouthAfricaseeing‘made
in Kenya’ or ‘made in Zambia’ is a
cause for celebration.
Being able to navigate, and ultimately confound, stereotypes
can mean the difference between
making it and failing. Woolworths,
for instance, had not anticipated
that Nigerians would snub South
AfricangoodsforEuropeanbrands.
Similarly, neither Score nor ShopRite has managed to crack the Tanzanianmarket,whichisdominated
by local and Kenyan players.
Anthony Haggar, chief executive
of South Sudan’s Haggar Trading,
says that understanding cultural
differences is paramount: “For the
Sudanese, the highest honour you
can bestow on someone is to invite them for a meal at your house.
If you are aware of this and you
accept – you should accept! – to
have dinner with the person, it will
enhance the trust between you.”
Curiously, the cultural differences associated with different
language blocs, as well as differences in legal systems and bureaucracy also seem more of an
issue than the languages themselves. Getting lost in translation did not seem to faze Ecobank, which invested in language
courses and translators.

South
African
agribusiness
Illovo’s
successful
expansion
into six
countries
involved
developing
a “local
flavour”
each time

DUE DILIGENCE

DEAN HUTTON/BLOOMBERG VIA GETTY IMAGES

70

Both Haggar and Dalgleish stress
the importance of due diligence
before making investments. Haggar says he spent 18 months making monthly trips to Ethiopia to
meet stakeholders and get to know
the country. For their part, Illovo
executivesspentconsiderabletime
and money researching a greenfield sugar project in Mali, only to
see it fall through with the 2012
coup. Better due diligence might
have prevented the flop of Kenya’s
M-Pesa mobile-money platform in
South Africa. It came up against
strong competition from banks
that had already developed services for low-income customers.
Despite Illovos’s Mali setback,
Dalgleish says that they “remain
resolute in their desire to invest in
Africa”. As the stellar rise of African

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COMPANIES & MARKETS | BUSINESS

championssuggests,itmakesgood
business sense too. Illovo’s African
expansion has driven the firm’s
growth. The demand for sugar has
been “about 2% for decades globally, but it’s about 3.2% across the
continent. And in some markets,
it’s better than that,” says Dalgleish.
Moroccan companies such as national airline Royal Air Maroc, telecomsoperatorMarocTelecomand
banks such as Attijariwafa Bank
and BMCE Bank of Africa have
made major forays across West
Africa. The region now generates
up to 30% of those banks’ revenue.
Importantly, the decision-making process has not been blindly
ambitious. As Attijariwafa Bank cochief executive Ismaïl Douiri puts
it: “It’s not the matter of growing
thefootprintorgrowingtheempire.
It’s really a matter of generating
additional value for shareholders.”
Africa’s potential could convince
African companies to invest on
their continent, but Ekpe argues
that there is more to intra-continental investment than cashflow.
“Foreign investment has never
developed a country. It has helped,
but in the end it comes from domestic investment and domestic
saving mobilisation,” he says. “You
cannot outsource development.”
Haggar likes to call it ‘Africalism’. “The ownership of the means
to produce and distribute wealth
should be African. We are too exposed to the tail- and headwinds
of the rest of the world. We have
everything to offer on the continent. We [could] be completely
self-sufficient if we traded amongst
ourselves and [had] investors.” ●

ABIDJAN, 21-22 MARCH
Diversification and thriving amid the
commodity crunch are key themes
at the AFRICACEOFORUM 2016

theafricaceoforum.com

THE AFRICA REPORT

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FRANCK AKPOUE FOR JA

INTO NEW REGIONS

Africa needs more bankable
infrastructure projects

More bang and more buck
Two business leaders offer innovative ideas to unlocking
financing for infrastructure projects and businesses

O

to play a bigger part, especially in the
ne argument that is often put
forward to explain the scarcity of
financing of small companies. Anthony
African investments is the lack of
Haggar, chief executive of South Sudan’s
financing. Many refute this theory as too
Haggar Trading, suggests that developsimplistic. Andrew Alli, chief executive of
ment finance institutions should lend to
the Africa Finance Corporation (AFC), arbanks rather than projects: “They should
gues that the obstacle is elsewhere: “The
provide risk capital and allow [local] banks
problem is the lack of bankable [infrastructo be more open to risk. That way, banks
ture] projects. Today, there is more finance
would get more involved in doing loans
looking for those types of projects than
and share risk. They would interact with
businesses and expand their contacts and
there are projects looking for financing.”
knowledge of the market until they can
Alli says that infrastructure projects
make better quality decisions.”
should look into alternatives to project
finance, which can be unnecessarily long
The issue of local currency comes back
and complex. One option would be to
time and again. Haggar suggests that this
is where governments’ contributions to
encourage companies to take projects
on their balance sheets and
borrowthemoneythemselves,
Local banks need to play a
shifting from project finance
bigger part, especially in the
to corporate finance. This is a
strategy the AFC is currently
financing of small companies
deploying in several countries.
projects should come in. “They should
Another tactic is to look at refinancing
models, whereby financing would be split
take on [a share] of the project in local curbetween the construction and operating
rencythroughpensionfundsorasovereign
phases. “Once the infrastructure asset
fund,” he argues. “It would demonstrate
has been constructed and running for
their commitment by having skin in the
a couple of years, it’s considerably less
game.” Alli says that investments in local
currencies would make some regional
risky. You can then have the project issue bonds and raise finance. That’s much
investors more comfortable too.
cheaper,” he explains. Finally, Alli says that
Finally, governments should look at
governments should build some assets
ways to unshackle their investment pothemselves, sell them once completed
tential. Alli cites the example of Botand recycle the money into other projects.
swana’s pension fund, which is limited
Beyond infrastructure, there is widein its international outreach due to government restrictions. ●
E.F.
spread agreement that local banks need

71

BUSINESS | COMPANIES & MARKETS

TIMBER

Guns, bribes
and chainsaws
The lumber trade in the DRC’s Nord-Kivu Province is
plagued by rebel kidnappings, while meddling soldiers
and government officials add to the disorder

A

t a busy outdoor lot near
the centre of Goma, the
ground is covered with
sawdust. Planks of wood are
stacked in haphazardly placed
piles. The space is messy, informal and frenetic, but every
businessman there knows his
way around the muddy paths,
the stacks of timber, the tiny
wooden sheds. Across this
bustling town, there are plenty
of smaller shops selling wood.
They get their wares here, at this
hub for timber exploiters in the
capital of the Democratic Republic of Congo’s (DRC) eastern
Nord-Kivu region.
A light drizzle turns to heavy
rain, sending everyone scrambling for cover amid the sweet
smell of dusty planks. E.B.*, 47,
settles into his own shed on the
edge of the lot and sighs about
the sorry state of the timber industry. “I’ve been working with
wood since 2002, and business
used to be good,” he says. “Today,
it’s not. Why? Because when you
go to bring your timber in from
the forest, you’re going to face
lots of harassment.”

estimated that the forestry sector
contributed just 1% to the DRC’s
GDP in 2007, in contrast to much
smaller countries like the Republic of Congo, Cameroon and
Gabon, where timber exports
accounted for 5.6%, 6% and 4%
of GDP, respectively. A more recent report from London-based
campaign group Global Witness
found that in 2014 total wood exports – more than half of which
went to China – amounted to
112,675tn, with a value of $195m.
Across the country, nongovernmental organisations
and activists accuse large foreign companies that operate
massive concessions – and the
government officials who work
with them – of flagrant profiteering. Today, the companies with
the largest concessions include:
Cotrefor, a Lebanese-owned
company; Siforco, whose parent
company, the Blattner Group, is

based in the DRC but is presided
over by an American citizen; and
Sodefor, also based in the DRC
but run by a Portuguese family.
In Nord-Kivu, concessions
tend to be small. Bursting as
they are with biodiversity, these
forests could be places where
the DRC’s abundant resources
are put to good use. Instead, the

Top 10 DRC timber importers

Tonnes of timber imported from the DRC between January 2013 and December 2015

China

France

185,572.28

56,873.92

INFORMAL CONCESSIONS

Though forests cover two-thirds
of the DRC’s land, timber contributes relatively little to the
country’s gross domestic product
(GDP). The true value of timber exploitation is unknown,
partly due to the informality of
granting concessions – an informality that persists despite
14 years of efforts to regulate
the industry – and partly due to
a general lack of reliable data. A
2011 report from the Center for
International Forestry Research

Portugal

Depublic
of Congo

19,130.48

14,908.86

Viet Nam
10,868.39

Namibia Belgium
5,306.17 6,240.74

Taiwan

India

7,917.29
THE AFRICA REPORT

3,952.49
•

N ° 78

•

UAE

2,641.78

M A R C H 2 016

SOURCE: GLOBAL WITNESS

72

BUSINESS

MADS NISSEN/PANOS-REA

for several attacks over the past
few years, calling the group a terrorist organisation with links to
Islamist groups around the world.
In January 2014, the national
armed forces, the Forces Armées
de la République Démocratique
du Congo (FARDC), launched the
Sukola I operation to fight against
the ADF militants. General Marcel Mbangu, who leads the operation, estimates that the ADF
now has fewer than 200 members. But, he added, their guerrilla tactics make them difficult
enemies. “The ADF is acting on
the soil of the DRC, but it must
have links outside,” says General Mbangu. “So it needs the
cooperation of everyone – all of
the international community – to
try and eradicate it.”

double threat of instability and
corruption continues to choke
businesses – and with it, hopes
for peace and stability. Militant
groups in Nord-Kivu are part of
the problem, but so too are the
corrupt dealings of government
bureaucrats and army officials.
E.B. operates a 100ha concession in Walikale territory, about
a two-day drive from Goma. His
workers, numbering up to ten at
a time, fell trees like eucalyptus
and white nongo, which he retrieves in a truck and then sells
to buyers in Goma. He is unsure
of his profit margins because
he lives hand to mouth, always
working to keep his children
schooled and fed.
TAXED AND TAXED AGAIN

“When you take wood from the
bush, you’ll hit a road crossing
and there might be rebels and
they’ll charge $5 to pass. You
don’t have any choice,” E.B. explains. “Then you reach a place
under government control. They
charge, too. Sometimes they give
you a receipt so that when you
arrive home you can show offiTHE AFRICA REPORT

•

N ° 78

•

cials that you’ve paid the tax. But
they’ll still make you pay again.”
When it comes to natural resources, the DRC is well known
for its mineral wealth – and for
the corruption and violence that
plague extraction operations.
Walikale territory, where E.B.’s
timber concession is located, is
also rich in gold and tin, which
have attracted the attention of
several armed groups.
The militias perpetrating
violence over the years have
included the Congrès National
pour la Défense du Peuple, the
Forces Démocratiques de Libération du Rwanda (FDLR), and
smaller, community-based
groups. Murky connections to
army officials seem to have allowed these militants to commit
atrocities – including one 2010
attack that resulted in the rape
of at least 179 women – without
much fear of capture.
Today, the most talked-about
militant group in Nord-Kivu is the
Allied Democratic Forces (ADF),
an Islamist outfit with Ugandan
roots. Army and government officials say the ADF is responsible

M A R C H 2 016

The softer
and poorer
quality
timber is
sold locally,
while the
best the
DRC’s vast
forests
can yield
is shipped
off to China
and other
importers

EXAGGERATED REPORTS

Some accuse the government
of overstating the ADF’s reach
for political reasons. Insecurity,
after all, has often served as a
distraction from the governance
issues that trouble this vast country. Several government critics
and political analysts suggest
that other groups – including
the FDLR, local Mai-Mai fighters and even individuals settling
personal scores – have been behind acts of violence that were
blamed on ADF.
Even the army has been implicated in foul play. In October
2015, a report from the United
Nations Group of Experts – which
focused primarily on militants’
activities – devoted a section
to the corrupt practices of the
FARDC. “During multiple missions in May, June and July 2015,
the Group found that FARDC officers deployed for the Sukola I
military operations against ADF
were involved in the exploitation
and sale of timber in Beni territory,” notes the report, referring
to an area north of Goma.
It adds that at a market on the
border with Uganda, multiple
buyers said they had purchased
the wood directly from FARDC
officers. Some soldiers reported
that they had been given the option to harvest timber instead
of going to battle.

73

BUSINESS | COMPANIES & MARKETS

Dan Fahey, a former Group of
Experts coordinator, explains that
the problem is not new: “Illegal
trade in timber has been going
on for a long time […]. What’s
changed in the last two years
since Sukola I began is that the
FARDC’s role in this trade has
become more prominent.” He
adds that these activities have
hindered military responses to
security crises, and that in at least
one case, the FARDC captured
ADF territory and immediately
began cutting down trees.
General Mbangu, who took up
his post in June last year, claims
that there have been no reports
of illicit timber exploitation or
cooperation with militant groups
during his relatively short tenure.
“I can’t even confirm whether
they existed before or not,” he
tells The Africa Report. “Take into
consideration the short time I’m
commanding this sector.”
KIDNAPPING

While the FARDC might be exaggerating about the ADF’s capacities in Nord-Kivu, the Islamist
group nonetheless poses a serious threat to civilians in the
northern reaches of the region:
kidnapping. Timber exploiters
are among their targets.

Beni town, about 250km
north of Goma, is home to the
largest concession-holder in the
province: the Enzymes Raffiners
Association (ENRA) company.
Though most of its profits
come from harvesting papain
– a papaya extract used to make
cosmetics, pharmaceuticals and
sometimes beer – the company
also harvests and processes timber. About half of it is for export,
with pine and cypress making up
most of its international sales.
Robert Ducarme travelled
from Belgium 43 years ago to
work as the company’s director
general. Once part of a Belgian
syndicate, today ENRA is owned
by the Bembas, a Congolese family best known for two of its members: businessman and former
senator Jeannot Bemba Saolona
and his son Jean-Pierre Bemba.
Both men served as formal owners of ENRA, but Saolona died in
2009 and his son is now on trial
for war crimes at the International Criminal Court.
Through times of war and upheaval, the ENRA facility has remained operational, with help
from the community. Today,
however, times are tough. Seated
amid packed bookshelves in
his pinewood-scented office,

Ducarme says profit margins
are deteriorating, citing insecurity, poor logistics and the high
costs of exporting.
The army does not make things
any easier, he explains: “People
cut trees in our concession regularly. Often civilians are cutting
the trees, but they are being paid
by the military […]. And when we
harvest the trees to bring them
here, soldiers often come and
tell us ‘Hey, these belong to us.’
So we negotiate.”

22%

of the DRC’s
timber is
exported to
the European
Union

SECRET LOCATION

With about 80 employees and a
concession covering 30,000ha,
ENRA is one of the largest businesses in Beni. But the ADF has
presented a new kind of challenge: the group has kidnapped
workers and forced ENRA to
negotiate for their release via
telephone.
Ducarme recalls an intense
back and forth to reach a ransom
agreement, followed by a complicated retrieval process designed to keep the abductors’
location secret. In line with
government descriptions of the
ADF, the victims recalled that
their kidnappers conducted Islamic prayers daily and spoke
languages including Luganda,
Kiswahili and English.
“They were not amateurs,”
adds Ducarme. “It’s become a
business, and that’s a terrible
thing.” Good business for militants and corrupt officials means
bad business for companies. For
the moment, there is little that
civilians can do. E.B. acknowledges this as he stares out into
the rain-soaked wood-lot where
his latest harvest is sheltered under a tarp. Force of habit, he says,
is all that keeps him in the timber
business. “This is just normal in
Congo,” he concludes. “All I can
do is tell the truth.” ●

SOURCE:
GLOBAL WITNESS

In Nord-Kivu
concessions
tend to
be small
and locally
owned, but
are still being
squeezed
by corrupt
officials

Jacey Fortin in Goma

GRAEME WILLIAMS/AMO-REA

74

Reporting for this story was
supported by the International
Women’s Media Foundation.
* E.B. is referred to by his initials to
protect him from any repercussions
from participating in this reporting.

THE AFRICA REPORT

•

N ° 78

•

M A R C H 2 016

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Netflix doesn’t hold all the aces
The video-streaming behemoth launched its services in every African country
in January. Are local providers running scared? Not in the least

U

nited States-based video
on demand (VoD) giant
Netflix announced its
surprise launch across Africa’s
54 countries on 6 January, heating up the competition for the
favour of the continent’s movie
and TV watchers. Reed Hastings,
co-founder and chief executive
officer of Netflix, shocked many
of Africa’s media players – who
had argued the company would
expand elsewhere before targeting
Africa – when he announced that
Netflix was now available in 130
countries, including every African
one. “Globally, we are now in over
70 million homes, and people
watch Netflix all over the world on

virtually any internet-connected
device. Tune-in has been replaced
by personal choice. We live in an
on-demand world, and there is no
going back,” Hastings proclaimed
to journalists. Netflix was a prime
mover in VoD, and its users currently watch in excess of 125m
hours of content per day.
VoD is becoming increasingly
popular worldwide as viewers opt
to watch what they want, when
they want and as much as they
want. African start-ups were the
first to spot the opportunity on
the continent, with the likes of
Nigeria’s iROKOtv launching in
2011 and Kenya’s Buni.tv in 2012.
With localised knowledge and

the capacity to adapt quickly to
market demand, they had a head
start in the African VoD market.
Multinationalcorporationswere
keen to follow suit. South Africa’s
Times Media Group launched
VIDI in 2014 and internet giant
Naspers started its own VoD platforms,AfricaMagicGOin2014and
ShowMax in 2015. Ericsson joined
the party in November 2015 with
its mobile-focused service NuVu.
SLOW STREAMING

With Netflix now live in Africa,
could this spell trouble for local
VoD providers? Definitely not,
according to founder and chief executive of iROKOtv, Jason Njoku,

The real battlefield will involve
content. iROKOtv is, in its own
words, known as “the home of
Nollywood”. With an audience
numbering in the hundreds of
thousands and some watching up
to five hours of Nollywood content a day, Njoku says iROKOtv
remains the only place audiences worldwide can access a
large volume of quality Nollywood content. Njoku sees the
company as a global player, as
approximately 55% of iROKOtv’s
users are based in the United
States and Britain.
Buni.tv’s Lora-Mungai agrees
that knowledge of what consumers like watching will dif-

which just announced a major
partnership with France’s Canal+
(TAR 77, February 2016). He says
that internet constraints – and
in particular costs – mean that
Africa is still a long way off from
adopting video streaming. Njoku
argues: “Mobile TV, rather than
VoD, is the immediate future of
content consumption in Africa.
I say this as, for the foreseeable
future, unreliable and superexpensive internet access will
not allow for consistent, quality
streaming for some time.”
Njoku says Android-based mobile video services that rely on
downloading will dominate the
video content market in Africa
in the coming years, but he adds
that traditional TV will also continue to be popular.
While agreeing that internet
availability and costs currently
prevent video streaming in Africa,
Marie Lora-Mungai, founder and
chief executive of Buni.tv, says

ferentiate Africa’s homegrown
providers: “Smaller players like
Buni.tv can compete through their
deeper knowledge of the local
market, by being more nimble
and adapting better to a shifting
situation. However, I believe that
the only true way to compete is
through original content creation.”
She adds: “Even though technology is a crucial component of VoD
services, in the end it’s all about
the content […]. Our strategy is
to create more original content
that people love.”
In 2015, Buni.tv partnered
with production company Ten10
Films to combine all elements
of the content pipeline under
one umbrella: Restless Global.
Through this company, the partners are identifying and developing local talent, and supporting it
to create original content, which
is then sold and distributed, including on Buni.tv. “Ultimately
[the winner of Africa’s audiences]
will be, just like everywhere else,
the player that is able to offer
the best quality, most relevant
content,” she says.
Netflix executives seem to know
that local content is its weak point,
conceding that the service carries “limited” African content in
“some” countries. They are quick
to add that Netflix will add more
local content as its popularity
grows and the company begins
to understand regional markets.
According to Anesu Charamba,
head of information and communication technology at research
company Frost & Sullivan Africa,
the battle between Netflix and
Africa’s existing providers will
ultimately be beneficial. “Netflix’s arrival on the continent will
bring about a bit of a shake-up in
the digital media space, with farreaching implications. Ultimately,
the consumer is best served by
the development as a result of
greater competition in the market,” Charamba says. ●
Gabriella Mulligan

VoD is nonetheless the future
of video viewing in Africa. “The
cost of data and internet speeds
are still a major challenge to the
growth of VoD in Africa, so at the
moment the only people able to
access this type of services are the
middle class in countries where
broadband internet has started
to spread, like Kenya or the diaspora,” Lora-Mungai says. She
adds: “I do believe that VoD is the
way forward for video in Africa,
even though the market is still at
an extremely early stage today in
2016. First of all, VoD is simply
a global trend, with consumers
worldwide demanding to view
premium content anywhere and
at anytime. We’re not going to
come back from that.”

Thousands
of films
and series
are available
at the click
of a remote
control –
to the lucky
few who
can get
and afford
broadband
internet

77

BUSINESS | LEADERS

INTERVIEW

Runa Alam
Co-founder and chief executive,
Development Partners International

We don’t
invest in
start-ups
Africa’s mid-cap and large-cap
companies have 10 to 20 years
of pure growth ahead, says Alam,
and pension funds are starting
to respond to that potential
TAR: Have you seen interest
from international pension
funds wanting to invest in
African private equity?
RUNA ALAM: We have pension funds in our latest fund,
which closed in March [2015].
The biggest group of investors are
indeed pension funds. And the
largest among those are the American pension funds, the second
largest are European and then
we had our first African pension
funds. You may know that African
pension funds have been getting
up to speed over the past several
years. This is in part because for
the first time the regulators are
allowing them to invest in private
equity – in a limited way and over
time. For us, it has been interesting talking to the pension funds,
and some of them have been quite
interested in Africa. Of the ones
that came in, I would say that we
are the first private-equity fund
in Africa they have invested in.
Is private-equity investment
preferable as a means to building corporate capacity than, say,
portfolio flows?

KALPESH LATHIGRA FOR JA

78

In Africa, that is particularly so
because we have very little or no
debts. So what is called private
equity in Africa is really growth
capital. For us, it’s not venture
capital. We don’t invest in startups. We invest in the main in
mid-capital companies, and partly
in the large caps. In Europe and
the United States these would be
classed as mid- and small-cap,
but in Africa they are considered
the larger companies. But even
though that’s the case, these are
by no means mature companies.
They are companies that have
between 10 and 20 years of pure
growth ahead. In our portfolio,
companies are growing anywhere
from 15% to 100% a year.
How might returns be affected by depreciating African
currencies?

AN EYE FOR
OPPORTUNITY
1985 Earned
an MBA from
Harvard
1995 Named
chief executive
of Union Capital
of Bangladesh
2007
Co-launched
Development
Partners
International
2015 DPI’s
second fund
closes $225m
over its target
at $725m

In local currency terms, they
haven’t seen a change yet. In hard
currency terms, of course, it depends on the country and whether
the currency in that country is
going down relative to the euro
or the dollar. Our first fund is a
euro fund; our second fund is a
dollar fund, so we can track both.
Having said that, in the past
couple of quarters our valuations
have not come down – they’ve actually been flat. What’s happened
is the growth in the companies
has basically been the same as
the decline in the currencies. In
Africa, currencies generally don’t
move together. This time they’ve
moved together more than historically but still [have] not all [been]
the same. North Africa and other
parts of Africa have currencies
that either have not declined or in
some cases have gone up slightly.

THE AFRICA REPORT

•

N ° 78

•

M A R C H 2 016

LEADERS | BUSINESS

How have you seen the ‘exit
ecosystem’ for private equity
in Africa develop and where do
you expect it to go in the next
five to 10 years?
Exits are very much dependent
on the company itself. It depends
on whether the private-equity
fund has bought the company at
the right price so it doesn’t have
to rely on ever-increasing growth
to come up with the equity returns they want. You find that
so-called blue chip companies,
those that we call best in class, will
find a buyer regardless, primarily
amongst the funds who are increasingly seeking to enter Africa.
And you also find it depends on
the country and the sector, so it’s
all of these things.
The best would be a growth
company within a growing sector [...] and then a best-of-class
company within that. Last year
we exited Mansard Insurance,
which is in Nigeria – Nigeria has
been growing at a good clip. We
were invested in Mansard, which
was the third-largest but the fastTHE AFRICA REPORT

•

N ° 78

•

est-growing [company] in the
sector. We had quite a bit of interest and in the end sold the
company to AXA. It was AXA’s
first entry into [sub-Saharan]
Africa and they chose Mansard
because of the quality of the
company but also because of
the quality of the management,
whom they expect eventually to
take them to other parts of Africa
and really be their growth.
So it depends on all of those
things, and I wouldn’t make any
generalisations. We also exited
a company last year to a financial investor, and we did a partial exit of a stock exchange to
listed funds.

“Exits to local investors are
increasing as more companies
want to grow across borders”
What about exits to local
investors?
There is a trend of African companies growing across borders
and becoming regional and panAfrican companies – so, really,
multinational companies – and
increasingly they are buyers of any
of our portfolio companies. There
are also buyers within the country,
and that is more developed in the
larger countries like South Africa,
Egypt, Nigeria and Morocco. But,
yes, that has definitely always been
there and is increasing as more
and more companies want to grow
across borders.
As they get bigger, the trend in
Africa has been not to go into a
new product but rather to go to a
neighbouring country with your
same product sets. It was made
easier quite a while ago in the late
1990s by the New Partnership for
Africa’s Development, which is a
government-to-government initiative to take down not just trade
barriers [but] all sorts of different
things [...]. In our portfolio, a company called Letshego is based in
Botswana – a very small country
by population. It’s now in 10 other
countries and therefore it’s been
able to grow to a market capitalisation of $700m, which in Africa
is a significant rise. ●
Interview by Nicholas Norbrook

M A R C H 2 016

APPOINTMENTS

Thabang Ramogase
Media agency Mindshare
South Africa’s brand
and marketing manager
Thabang Ramogase
became the company’s
chief executive in
January. He has previously
worked for Nando’s,
Coca-Cola and MTN.

Halla Sakr
In January, banker Halla
Sakr left her post as deputy
chief executive of HSBC
Bank Egypt to become
managing director
of Barclays Bank Egypt.
At her previous post, she
helped to expand HSBC’s
retail and personal
finance
a ce businesses.
bus esses

Romuald Wadagni
Wadagni has built his career
at auditing firm Deloitte
and was recently promoted
to head of auditing for
Francophone Africa. Prior
to being a managing partner
at Deloitte, the accountant,
who trained in France and
the US, was chief executive
of the firm’s operations
in the Democratic Republic
of Congo.

ALL RIGHTS RESERVED; WITTY PICTURES

What percentage of your portfolio is exposed to the end of the
commodities supercycle?
That is almost impossible to
determine because we are investors in consumer-facing
companies: banks, insurance,
fast-moving consumer goods,
pharmaceuticals, that sort of
entity. The impact would really
come on a very macro level.
In Africa, you have three
sorts of countries. You have
those where they are exposed
to commodities, oil and gas in
particular, like Angola. Secondly,
you have countries that have exports of commodities but that
are much more diversified today
than they were a few years ago,
such as Nigeria. And then you
have countries that in the future
may be exposed to commodities because there’s lots of exploration going on […] and that
would be countries like Kenya or
Ethiopia. So it’s a mixed bag, and
it depends on the country. Our
portfolio goes across the whole
continent, and it is primarily
consumer-facing.

79

80

HANNIBAL
FINANCE

Dropped calls
HANNIBAL HEARS NIGERIAN officials
are less than happy that South African
telecoms provider MTN hired former
US attorney general Eric Holder to negotiate
its out-of-court settlement with the
government. They say MTN had already rebuffed Nigerian
attempts to find a compromise and that the South African
company was likely to get a deal with the previous legal
team. With a fine of up to $3.9bn on the line for not having
disconnected unregistered SIM cards, MTN would seem
to be better served by understanding the mood in Abuja.
It is not as if Washington has a special relationship with MTN
either, as the company has invested in Iran since 2004.

Currency conundrums
WITH THE PRICE of commodities dropping and the
strengthening US dollar, governments are left with stark
choices. Egypt is propping up its currency, which is hurting
businesses by limiting the amount of foreign exchange.
US-based auto manufacturer GM announced in February that
it had momentarily suspended production due to difficulties
in importing parts. South Sudan’s currency has been in free fall
due to the low oil price and its long-burning conflict, leaving
East African Breweries to close down its Juba operations.

The ants and the grasshoppers
THE ROUT IN COMMODITY PRICES is creating plenty of
winners and losers. Mining giants Anglo American, Glencore
and Vale have been selling off assets to stave off financial
difficulties. Some small companies, like South Africa’s Sibanye
Gold, are growing bigger and diversifying on the backs
of their larger rivals thanks to their sounder financial footing.
Sibanye bought a platinum mine from Amplats in September
2015 in a deal that allows the gold miner to defer its payments
and receive money if the assets purchased have negative
cash flows. Chief executive Neal Froneman said in February
that Sibanye is in the market for cheap coal and platinum
assets. Anglo American is promising a more aggressive
shake-up, meaning that there are many more deals to come
before the commodity cycle changes track.

Zambian two-step
PRESIDENT EDGAR LUNGU’S GOVERNMENT is upholding
a fine tradition of proposing radical changes to the business
environment and then backtracking once the moves
prove unpopular in the business community. In February,
the state power company ZESCO flip-flopped on a measure
to increase electricity prices to commercial users by 73%.
This indecision echoes the government’s previous attempts
to reform mining taxation. The Patriotic Front-led
administration twice reversed course in 2015 on raising
royalties after mining executives spoke out vociferously.
With urgent needs to invest in new-generation capacity
and dams at record low levels due to drought, the government
is faced with stark choices to bridge ZESCO’s funding gaps. ●

Barclays
may want
out of Africa
A new leadership and
the weakening rand
could lead the bank
off the continent after
more than 100 years

T

he recently appointed
chief executive of Barclays
bank, Jes Staley, could sell
the company’s African operation
– the third largest by turnover on
the continent – amid concerns
that the South African economy
will continue to perform poorly.
Since Staley, 59, took the helm of
the bank on 1 December last year,
a chorus of analysts and former
executives have urged him to offload Barclays Africa Group (BAG),
in which the British bank owns a
62% stake. BAG has a market value
of about $6.7bn and total assets of
$85.4bn. “Barclays has historically
been in a very good position there,
but is suffering in South Africa
economically,” Michael Rake, the
bank’s former deputy chairman
told reporters.
Both Staley and chairman John
McFarlane say they seek to refocus
the bank’s operations on US and
British operations. Media reports
suggest Staley is leaning towards
selling BAG. He has questioned
how the African operation fits in
with the rest of the group’s activities, says the Financial Times.
In an open letter to Staley,
Chirantan Barua, an analyst at
Sanford C. Bernstein, said: “With
just about 10% of your earnings
from Africa, you never get a bid
up when the continent’s in a bull
market; but when the rand is in
free fall, investors are prompt to
knock it out of your valuation. So,
simply put, you should let the franchise go.” Barclays is expected to
give a strategic update on 1 March
when it delivers its full-year earnings report. ● Mark Anderson
THE AFRICA REPORT

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in the countryâ&#x20AC;&#x2122;s march towards the
acquisition of critical skills, knowledge and
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Find out more at www.cwcghana.com or contact the team on GhanaEnq@thecwcgroup.com +44 207 978 0000

82

DOSSIER
AGRIBUSINESS

SOUTH AFRICA

Tiger loses
Tiger Brands caught
executives fudging sales
figures in Kenya, and now it
has written off $120m from its
Nigerian business. What is
next for one of the continent’s
largest agribusiness firms?
By Mark Anderson

C

apturingnewAfrican
markets has not
been easy for Tiger
Brands. In May last
year, South Africa’s
largest food producer sacked the
managing director of its Kenyan
business, Haco Tiger Brands,
after he ordered subordinates
to stash cereal, energy drinks,
rice and pasta in a third-party
warehouse to give the impression that sales targets had been
met. “They were key executives
right at the top. It was difficult to
pick this up,” Peter Matlare, Tiger
Brands’ chief executive officer at
the time, told reporters.

Nigeria has provided further
headaches. In December, after
three years battling stiff local competition, government bureaucracy
and currency devaluation, Tiger
Brands sold 65% of its stake in its
Nigerian business, Tiger Branded
Consumer Goods (TBCG), back
to the Dangote Group for $1 and
an immediate cash injection of
$46.1m. Tiger Brands paid $200m
for its stake in the firm in 2012 as
part of an ambitious strategy to
expand its presence across the
continent. It wrote off $120m from
the operation in late 2015.
Before he tendered his resignation in September, Matlare had

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•

M A R C H 2 016

83

its stripes
fought hard to boost the company’s presence in Nigeria. He
paused production at some of
its mills and tried to introduce
flour and pasta products with
higher profit margins. However,
an abundance of competition, including from heavyweight Nestlé
Nigeria, stifled these efforts. “We
got a lot of [the initial purchase of
TBCG] wrong, and for that there
are consequences, and those consequences are playing out,” Matlare said in an earnings call with
investors ahead of the sale. He
added that the Nigerian fiasco that
happened under his watch “will
be my Waterloo”. At the time of
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•

N ° 78

•

$120m
written off
from Tiger
Branded
Consumer
Goods
in late 2015,
resulting
in a 2%
drop in Tiger
Brands’ profits

M A R C H 2 016

his resignation, Matlare warned,
however, that Tiger Brands will
not grow strongly if it focuses on
the South African market alone.
Tiger Brands reported an unexpected 2% drop in its full-year
profits due to the Nigerian writeoff. When Matlare announced that
he would step down at the end of
2015, saying it was “the right time
for new leadership”, the firm’s share
price rose to a four-month high.
GOVERNANCE DEFICIT

have deceived Tiger Brands
about the profitability of its Nigerian business. He blamed Tiger
Brands’ management for the failure of its Nigerian venture. This
assessment is shared by Aly-Khan
Satchu, a Kenya-based analyst:
“You’ve got to ask, internally
what’s happened? I don’t think
[Tiger Brands] have been able to
transfer their skills out of South
Africa and when it comes to acquisition I don’t think their due
diligence stacked up. The problem is a corporate governance
deficit in a lot of these [South
African] corporations and therefore what might look wonderful

THE NEW YORK TIMES/REA

From sacks of flour to
sackings, Tiger Brands has
had a disastrous year

84

DOSSIER | AGRIBUSINESS

on paper in fact has not transpired to be the exact reality.”
Satchu adds: “[Tiger Brands] got
caught up in the ‘Africa rising’
narrative and decided they had
to move really quickly and they
basically came off the wrong side
of both those transactions, in
Nigeria and in Kenya.”
But other analysts point to external factors in the breakdown of
Tiger Brands’ foray into Nigeria.
“Tiger management faced the perfect storm of events just when they
entered, including higher wheat
tariffs, deteriorating growth with
consequent price competition,
a depreciating currency and of
course Boko Haram’s impact in
northern Nigeria, where Tiger
had material exposure,” says Jiten
Bechoo, an equities research analyst at Avior Capital Markets. In
the quarter ending 31 December
2015, TBCG reported a pre-tax
loss of N975.3m on stagnant revenue of N10.57bn as compared to
the same period in 2014.
Tiger Brands’ board is due to
name Matlare’s permanent successor at the end of March. The
company declined requests for
comment from The Africa Report
about its recent problems and its
plans to turn its African activities around.
CANCELLED DEALS

The troubles in Kenya and Nigeria
call into question Tiger Brands’
strategy of growth through the creation of joint ventures and buying
majority stakes in other African
companies. Tiger Brands had also
run into difficulties in previous
Kenyan deals. In February 2014,
it announced it had bought Rafiki
Millers and Magic Oven Bakeries
– a flour milling and bakery com-

pany, respectively – before cancelling the deals in March.
The vision for the agribusiness
giant’s expansion is certain to be
a key factor in the appointment
of its next leader. Chief executive Matlare had been in his
post since 2008, so the change
in leadership is likely to lead to
a shift in strategy.
Acting chief executive Doyle
said that Tiger Brands must expand its presence in new and existing African markets if the company is to offset its losses at home.
It already has manufacturing
centres in Cameroon,
Ethiopia, Kenya, Nigeria
and Zimbabwe, and it sells
its products in 20 African
countries.
Kenya is likely to be a priority
country in the expansion strategy.
A growing population, rising incomes and growing financial inclusion spurred by the country’s
mobile boom have helped Kenya’s
economy to create solid growth.
Analysts at research firm Business
Monitor International have forecast that Kenyan households will
increase their spending by 4.8%
this year. But last year’s dismissal
of Geoffrey Kiarie, who had been
in charge of Tiger Brands’ Kenyan
business, leaves the company in
search of strong leadership in East
Africa’s biggest market.
Another possibility is that Tiger
BrandswillgoaftersomeofAfrica’s
fastest-growing cities, like Dar es
Salaam and Kinshasa, which are
becoming lucrative markets in
their own right. But Tiger Brands’
plans for expansion will face a
series of challenges, including
spikes in the price of maize and
wheat, and a weak South African
rand, which will lead to higher

production costs and lower consumer purchasing power.
“Tiger’s grain margins will decline in the year ahead, and this
division is a material contributor
to group profits. Lest we forget,
that competition is likely to intensify in these tough times,” Avior
Capital’s Bechoo explains.
SALVATION IN CHOCOLATE

The price
Dangote
paid to
buy back
Dangote
Flour Mills
from Tiger
Brands
in December
2015
SOURCE: DANGOTE

With higher food prices in
drought-stricken areas, Tiger
Brands is looking to cut costs
rather than pass on the rising
prices to consumers. At
home in South Africa, Tiger Brands has been raising
its historically low spending on
marketing in order to defend its
market share from rivals like Pioneer Food. Another area of focus in
its home market is investing more
in developing new product lines.
However, there are some positive signs that Tiger can boost
its business around the continent. Chococam, the company’s
Cameroonian snacks business,
showspromise.TheCameroonian
subisidiary, which makes chocolate, chocolate spread, candy, gum
and powdered beverages, posted
12% growth in operating income
and volume growth of 9% last year.
“Although discretionary in
nature, it appears as though the
business has the right formula
going,” Bechoo argues. Analysts
agree that Tiger Brands is right
to prioritise expansion across
the continent, but the debate is
on how to do it well. Satchu concludes: “The Africa-wide strategy
is the correct one – you’ve got
much faster growth, admittedly
from a lower base.” But Tiger
Brands, he adds, “has to recalibrate its strategy.” ●

Tiger Brands’ African expansion

2008

2011

2012

2015

Buys 51% stake in Haco
Industries in Kenya.

Buys interests in the East
African Group of Ethiopia,
Deli Foods of Nigeria
and Davita, a South African
producer of powdered
seasoning (Benny)
and beverages (Jolly Jus).

The figures are simple:
more working-age people
equals beer industry growth

BRENT STIRTON/GETTY IMAGES

BREWING

Beer maintains its head start
Africa is thought to be the world’s fastest-growing
beer market and the major producers are competing
for regional expansion across the continent

B

eer sales in Africa will grow
faster than in any other
region between 2015 and
2020, registering a volume increase of 37,000 hectolitres per
year, according to projections by
Canadean, a UK-based research
outfit. Sales in Zambia, Kenya
and Ethiopia will be particularly
strong in the coming years, the
firm says. “This notable growth
will be fostered by the flourishing
economic parameters such as increasing gross domestic product
growth rates, fast-growing urbanisation and above all the rising
population with a working-age
demographic set to surpass that
of China and India,” Piyumika
Jayasena, an analyst at Canadean,
told reporters.
Africa’s young population
has lured some of the world’s
largest brewers to the continent. SABMiller, Heineken, Castel
Group and Diageo all have African

operations. Beer producers across
the continent are also braced for
the merger of two industry behemoths, SABMiller and AB InBev,
which is underway.
MORE GUINNESS
THAN IRELAND

SABMiller, the world’s secondlargest beer producer by revenue,
posted 18% growth among its
African subsidiaries in the third
quarter of 2015. “Africa performed
well across the board,” said Alan
Clark, chief executive of SABMiller,
who noted the particularly strong
performance of South Africa. But
economic woes, brought on by
record-low oil prices, caused SABMiller to slash its growth forecast
in Nigeria from 8% to 3%.
Diageo, the largest producer
of spirits in the world, has made
massive inroads in some of the
continent’s most lucrative markets
thanks to its signature Guinness

beer, which sells more in Africa
than in Ireland, where it was invented. The brewer wants to build on
this success by targeting East Africa
with its subsidiary, East African
Breweries. East African’s chief executive, Charles Ireland, said: “We
have ambitions to grow our reach
across the region and have more
significant business in Rwanda,
Burundi and eastern DRC. We
are seeing very healthy growth in
Rwanda – I think over 30% revenue
growth from a very small base. We
want to have a meaningful presence in everyEastAfrican country.”
The Ugandan and Tanzanian
markets are particularly attractive, he added. “We see market
share growth in Uganda, where
we are well positioned to capture
a good proportion of the market.
We are seeing volume growth
in Tanzania and market share
growth in Tanzania. We are looking at Tanzania delivering a good
second half for us.”
Heineken’s chief executive,
Jean-François van Boxmeer, is
pushing for investments in Côte
d’Ivoire and South Africa. But the
firm cautioned in its 2015 annual
report that it has seen an annual
2% drop in sales in Africa, the
Middle East and Eastern Europe.
The El Niño-linked drought
could disrupt production this year
andhurtcompanies’performance.
East African Breweries’ Ireland
explained: “The farmers in Kenya
particularly have been impacted.
Barley crops are being affected.
We are working with the team to
mitigate some of the impact of late
harvesting of the sorghum crop,
which is happening as a result of
the rains continuing.” ●
Honoré Banda

Predicted growth in beer sales, 2015–2020
5%

Africa

3%

1%

1%

Asia

Europe

North
America

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•

SOURCE: CANADEAN

86

M A R C H 2 016

DOSSIER | AGRIBUSINESS

EL NIÑO

Farmers warned
the worst
is yet to come
Shifts in the warm waters
in the Pacific Ocean – known
as El Niño – are increasing
food insecurity and causing
droughts and floods across
Eastern and Southern Africa

A

frican grain output is forecast to plummet
this year. A prolonged drought brought
on by the El Niño weather phenomenon
is wreaking havoc on maize, rice and wheat
production across the continent, aid agencies,
business analysts and governments warn. Poor
crop yields in last year’s harvest have put at least
52 million people in Eastern and Southern Africa
in desperate need of food aid, according to the
World Health Organisation.
Food security is predicted to worsen this year
as grain harvests continue to slide. South Africa,
a powerhouse of maize processing, has slashed
its projected output by 25% for the coming year.
Meanwhile, in Ethiopia, memories of the 1983
famine have resurfaced as foreign governments
rush in with food assistance to help more than
10 million people who are thought to be facing
desperate food shortages. ● Mark Anderson

Cereal production by region
(million tonnes)

North Africa
2014 estimate
2015 forecast

34.7

39

East Africa
57.6

56.5

50

43.5

West Africa
Central Africa 4.9 4.7
Southern Africa

(exclud. South Africa)

36.1

South Africa

27.9
SOURCE: FAO

DAN KIYI/AP/SIPA

88

El Niño brings the Horn’s worst food
shortages in years
AID AGENCIES ARE SOUNDING the alarm about the worst food
shortages in the Horn of Africa for decades. As many as 22 million
people could face food insecurity and malnutrition this year.
Ethiopia’s main cereal crop, known as the meher harvest, yielded
75% less than usual in some of the worst-affected areas of the
country. The Ethiopian government and aid agencies estimate
that $1.4bn is needed for the country to address the crisis. Flash
flooding could make the situation much worse for up to 3.5 million
people in Ethiopia, Somalia, South Sudan, Kenya and Uganda.

18.8 15.1

Southern Africa’s bitter harvests
THE DROUGHT HAS FORCED South Africa to forecast a 25%
drop in its maize harvest this year. Emergency food security
conditions have been declared in five of the country’s nine
provinces and experts say that South Africa might have to import
3.8m tonnes of maize to make up the shortfall. The region’s biggest maize
producers are expecting big losses in this year’s harvest. Officials
in Namibia said production will drop by 44%. Zimbabwe announced
in January that it would borrow $200m from Afreximbank to import maize
and declared a state of emergency in many drought-stricken areas.
Meanwhile, maize prices soared by 66% between last year and this
January, making the staple unaffordable for many. More than five million
people are expected to face food insecurity this year in central
Mozambique, southern Malawi, southern Madagascar, south-eastern
Zambia, Zimbabwe, Swaziland, Botswana, Lesotho and South Africa.
THE AFRICA REPORT

El Niño is going to be terrible
TAR: How will the El Niño affect
smallholder farmers across the
content?
In one word, it’s going to be terrible.
Last year, I was in Zambia and
I was told that 14 districts in the
country had not had a single drop
of rain. South Africa, for the first time
in 10 years, has imported food
because they have had such terrible
production of maize. Many other
countries, including Rwanda, have
much less food than they expected.
Ethiopia is in a food crisis. So
when you look at a map of the areas
that are optimum for food production,
they have been affected the most.
This is going to affect a lot of people
in African countries.

SOURCE: PRINCETON UNIVERSITY

?

JOAO SILVA/THE NEW YORK TIMES-REDUX-REA

?

THE AFRICA REPORT

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M A R C H 2 016

Which agribusiness companies
are working well with African
smallholders?
In Kenya, East African Breweries
is now purchasing sorghum from
farmers. In Malawi, there is Universal
Industries that is purchasing from
farmers. In Rwanda, we are seeing
cassava factories. These kind of
emerging industries are more mediumsized industries that are beginning
to see the money coming out of
smallholder farmers. The companies
that are doing the most are working
with some of the easier-to-deal-with
commodities like maize and beans.
These can be aggregated and supplied
to demand areas near schools and
to other countries that don’t have
as much. What we see as really
significant is when companies that
have a lot of market influence become
interested in smallholder produce.

What should Africa’s political
leaders be doing to connect
smallholder farmers with value
chains?
Farmers in Africa are, in a number
How can Africa’s private
of places, quite isolated from markets.
sector work more closely with
Prioritising infrastructure is one thing
smallholder farmers?
leaders can do. From an
agricultural perspective,
Smallholders need access
there is also agricultural
to markets that encourage
infrastructure that is
lacking in terms of helping
them to produce surplus food
farmers improve their
yields to reach levels that create
This is beginning to happen
surpluses, which can then feed
in a number of places, and African
businesses are beginning to
into value chains.
understand the value of selling
fertilisers and seeds to African farmers.
What are the financial benefits of
They’re also beginning to understand
unlocking the potential of Africa’s
the value of purchasing [produce]
smallholder farmers?
from farmers. But there are lots
The African food market is going
of challenges. Companies need to
to be worth about $1trn by 2030.
be able to move produce from one
So the question then becomes:
place to another – that is beginning
Are Africans going to be importing
to happen. They need to understand
most of that food? Right now, we are
the complexities of agriculture and how
importing about $30bn worth of food.
to get the most out of it and how to
This is money that these smallholder
add value to it. Right now, this is limited
farmers could tap into and grow
by lack of access to finance. Financing
themselves out of poverty. But for this
remains one of the biggest areas
to happen, African farmers must have
for companies to expand. ●
access to markets that encourage
Interview by Mark Anderson
them to produce surplus food.

89

90

ART & LIFE
URBAN LIVING

Streets
ahead

As Africaâ&#x20AC;&#x2122;s proudly burgeoning cities spawn skyscrapers
and shopping malls, community spaces are being squeezed
out. The Africa Report meets activists and artists who are
reclaiming the streets and pumping life into the metropolis

Addis Ababaâ&#x20AC;&#x2122;s skyline shows
a city on the up, but down below
its citizens yearn for greenery

91

I

t’s a sunny Sunday afternoon in Addis
Ababa, and a newlywed couple strolls
hand-in-hand down Menelik II Avenue, posing for photographs. Their
blue-themed wedding party is behind, admiring and waiting patiently,
sometimes taking their own selfies. Their
backdrop:AddisAbabaPark,abeautifully
manicured green space that is encircled
by the avenue. It’s a picturesque location,
save for the fact that the park is fenced
off and closed that day, like most days.
It’s a typical Sunday afternoon scene,
explains Mahder, an architect who points
out that the wedding parties’ parked cars
take up avenue lanes, block traffic and
cause a commotion. But what other options do they have? “We don’t have real
parks here, so this is how people use
public space now,” he says.
Ethiopia’s economy is growing and
diversifying. Addis Ababa has become
the fourth largest diplomatic centre in
the world, with more than 90 embassies

and consulates. The government-led
infrastructure expansion has seen an
increase in roads, a new light rail system and construction works on every
skyline. Future offices, hotels and condominiums are rapidly transforming the
city’s streets, filling in vacant plots and
replacing older homes and buildings.
PARADISE LOST

“The city is shining, but who is this development for?” asks Hailemelekot Agizew,
born and raised in the city and a senior
expert in heritage management at the
Authority for Research and Conservation of Cultural Heritage. “When I was
a child, Addis was beautiful. There were
wild animals, rivers were clean, indigenous trees, green fields… It’s like it was a
dream.Howcouldwelosesuchscenery?”
His sentiment is common. But, while
parks are diminishing, people in cities like Accra, Lagos and Cape Town
are using everyday public spaces like

streets and pavements – even walls – in
new ways. Preparing for its sixth edition later this year, Chale Wote Street
Art Festival in Accra takes place in the
historic but economically deprived Ga
Mashie neighbourhood. For two days in
AugustorSeptember,artistsandresidents
take over High Street, and it becomes a
teeming, energetic, connected space for
murals, graffiti, music, art installations,
bike stunts, performances and people.
The festival attracted hundreds of visitors in its first year in 2011 and thousands
in 2015, ushering in a new art-inspired
economy that thrives in the public space.
“I was sceptical before I first went in
2013,” says Kwesi, an IT specialist from
nearby Tema. “The roads are always for
cars, trotros, taxis – never for people.
Maybe we can’t build new parks, but
this festival shows me what’s possible
with what we have already.”
InLagos,theprivatesector-ledvisionof
urban modernity is Eko Atlantic, Nigeria’s

ZACHARIAS ABUBEKER

By Victoria Okoye in Accra, Lagos and Addis Ababa

ART & LIFE

most expensive and exclusive district.
Just off Victoria Island, the high-profile,
10-square-kilometre land reclamation
and development project will include
lifestyle locations, malls, a cinema and a
Miami-inspired landscaped promenade.
The intent is for “private” public spaces
tailored to Eko Atlantic’s affluent market
and consumers, and that’s a key selling
point, explains Haleema, a sales agent.
When asked about plans for “public”
public space at Eko Atlantic, Haleema
adds that plot owners are welcome to
construct parks or plazas within their
purchaseddevelopments.Theonlycatch:
plots are selling at a minimum of $200
per square metre.
Despite this trend of exclusivity, local
initiatives are tapping into what draws
people to Lagos’s public spaces to make
them more inclusive. “The space where
I see things happening is leisure,” says
Olamide Udoma, urban practitioner
and director of Future Lagos. “People
say Nigerians don’t want parks. I think
Nigerians do enjoy open space and they
do want it and need it.”
Simple and spontaneous ideas are
effective in reclaiming the city. Olamide points to Picnickers Anonymous
of Lagos, an open group that organises picnics in public spaces around the
metropolis, and a cycling group on the
Island that organises rides on the last
Saturday of each month, taking advantage of city-mandated environmental
cleaning, which keeps cars off the roads.

Clockwise
from right:
energy and
colour at
Dakar’s
Festigraff
festival in
April; the
future Eko
Atlantic in
Lagos, where
public space
is “private”;
green for ‘Go’
at Cape
Town’s Open
Streets Days

PARTY ON DOWNTOWN

Architect Papa Omotayo and his team at
A Whitespace Creative Agency organise
block parties in Lagos. In November 2015
they took their party to the two-block
stretch of Broad Street on Lagos Island
(from the historic Printing Press building to Freedom Park). The Sunday event
brought together artists doing live work,
street performers, music, local vendors
and food purveyors. “It’s all about providingplatforms,” Omotayosays.“Theprivate
space can feel elitist, so we take things out
to the public and give them platforms
where they can engage and see art and
be immersed in the collective.”
In South Africa, the Open Streets
concept has come to Cape Town, in
which streets are closed to traffic for an
entire day, allowing for full community
recreational, social, art and entertainment activities to fill the space. Marcela
Guerrero-Casas, co-founder and director
of Open Streets Cape Town, says what

NIC MANSHON

92

made her organisation’s work creating
open streets possible was “long-term engagement” and existing city government
interest in inclusivity and commitment to
non-motorised transport. “[We fit] into
a series of different objectives that are
aligned with city policies,” she explains.
Some interventions are vertical. In
Dakar, graffiti artists engage walls as art
canvases for public commentary. Using
their spray cans as speak-pieces, and with
waves of colour and imagery, artists like
Ati Diallo transform what would be segregating, bare walls into platforms for
community dialogue. “The aesthetic is
our strategy,” Diallo says, explaining how
he uses techniques otherwise employed

in advertising to the public good. “Imagine a wide wall. If it’s empty, it doesn’t
interest anyone. When we add colours
to the wall, it forces people to look. […]
If we put a message against violence at
one side and the face of a beautiful girl
on the other, when someone passes by
they’ll first notice the beautiful girl, then
automatically they’ll read what’s there.
That’s how we speak our message.”
Streets are public spaces and drivers of
prosperity for cities, a 2013 UN-Habitat
study concludes, and they play a key
role not only in infrastructure and urban
productivity, but also equity, social inclusion and citizens’ quality of life. In a
gauge of how much city space is given
THE AFRICA REPORT

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M A R C H 2 016

ART & LIFE

IN NAIROBI’S CENTRAL BUSINESS DISTRICT high-rise office blocks and
government buildings tower above the lush greenery and space of Uhuru Park.
On any day the park is filled with picnickers, nappers, joggers and boat
paddlers, an oasis amidst grey concrete. That this is here is largely thanks
to the late activist and environmentalist Wangari Maathai and the Green Belt
Movement. In 1989 they campaigned relentlessly to save the park from
a multi-use business and shopping complex. Though the government tried
to discredit her, Maathai’s protest led the international investors to back out.
“Green spaces act as the lungs of a city,” says Eric Kigada a Nairobi-based
architect with B & A Studios. Kigada says it took some Kenyans time
to understand Maathai’s work, feeling that green space is a waste of land.
Outdated urban plans have meant that the fast-growing city has not kept
up with itself. Though much of the development is needed in economically
under-privileged areas these places tend to be overlooked. A master-plan
produced in 1973 ended in 2000. More recently the Japanese International
Cooperation Agency (JICA) launched an infrastructure-heavy plan in 2015.
In the face of selective development a growing number of organisations
are still running with the baton handed to them by activists like Maathai
to create and sustain accessible public space. Most recently the wildlife
conservation organisation WildlifeDirect is campaigning against plans to use
part of the Nairobi National Park – the only wildlife park in the world that is in
a capital city – for the construction of a railway line. ● Billie Adwoa McTernan

EKO ATLANTIC

LESLIE RABINE

Keep Nairobi Green

over to streets Accra ranked among the
lowest with 11.1%, while Addis Ababa
and Lagos were marginally higher, at
13.4% and 14% respectively. Cape Town
streets made up 25.2% of city space. The
study’s ‘Composite Street Connectivity
Index’ assessed how connected cities’
street networks are. Again Accra was
on the lower side of this spectrum at
0.287 on the index, Addis and Lagos
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approached middle ground at 0.428 and
0.449, while Cape Town’s score of 0.832
ranked highest in Africa.
The presence and connectedness
of streets is just the first step. Securing
streets for festivals and other community
actions means getting through the red
tape required to pedestrianise the street
and opposition of those who are wed to
their vehicles. In Cape Town, Guerrero-

Casas says the process of getting the permits is still cumbersome, expensive and
not always clear, making it daunting for
other neighbourhoods or organisations
who would like to open up their streets for
more public uses. In Lagos, block party
organiser Omotayo says securing the
permit took months, and approval didn’t
come through until three days before the
event. Security is also a concern, and in
both Accra and Lagos festival organisers
must pay for police personnel or government officials to monitor their events.
A common thread running through
the experience of all these activists is that
volunteerism and partnerships across
community and government stakeholders have been key to transforming regular streets into vibrant public spaces.
“Open Streets Days would simply not be
possible without the committed volunteers who have joined our organisation,”
Guerrero-Casas says. “Furthermore, we
get in-kind contributions to the organisation as a whole because people believe
in what we are trying to achieve.”
Attheheart of theseefforts are ordinary
citizens who want better public spaces
they can enjoy, in whatever form, like
Hailemelekot in Addis Ababa. “In Lagos,
at least they can see the Atlantic Ocean.
So can they see the beach in Accra. But
in Addis, where should you go? You cannot see a beach where you can take your
children, you cannot see a field where
they can go and play.” ●

93

94

ART & LIFE

Art
Complex
simplicity
Nairobi artist Michael
Soi’s paintings disarm
with their pop-art style
but pack a satirical
punch. Now his beach
boys, strippers, sex
tourists and Chinese
businessmen are icons
in their own right

G

nights. So what I am doing right now,
reat silver silos stand among
I am basically documenting Thursday,
factories and warehouses in
Nairobi’s industrial area. Amidst
Friday and Saturday,” he explains wryly.
the retailers, workshops and traders is
The bars, nightclubs and strip clubs of
Nairobi form the backdrop to these overthe GoDown Arts Centre, aptly located
in the city’s main area of production belooked weekend habits in Soi’s work.
cause it is here that one of Kenya’s most
He points to a painting on the wall.
prolific artists has his studio. Occupying
Two men are sitting on a bench ogling
one unit in the warehouse-turned-artsthewomeninfrontofthem.Aswithmany
of the other female protagonists in his
space, Michael Soi has no guilt about
works, the women’s voluptuous curves
crossing the boundary between art and
“merchandising”. The place is filled with
spill out of their short shorts and mini
large canvases of his work, half-filled
skirts. “If you go to Nairobi, especially
paint pots and bumper stickers with his
where they have the benches, you will
trademark images.
Soi’s images may be
“If you want beautiful art go
children’s-book colourful
to the next people. I will address
and look great on the tote
issues that affect people locally”
bag actres Lupita Nyong’o
Instagrammed herself wearing, but they are also laced with satirical
always see their [men’s] heads moving in
social commentary. Focusing on themes
that direction [of the women],” he notes.
like gay relationships, interracial relationSome observers have been irritated by
ships and commercial sex, Soi’s pictures
these images, reading the female characgive an insight into aspects of Kenyan soters as props created to satisfy the male
ciety that are often swept under the cargaze. But Soi argues otherwise. His picpet. “We are a [mainly] Christian country,
tures tells stories, he says, such as that
we love God, we go to church on Sunday,
of a woman he knows, a dancer, who
we sing very loudly but nobody tells you
left her job at the bank where she was
what they do on Friday and Saturday
stressed out by her boss and decided to

work at a strip club. “She basically wants
to do her own thing and have her own
joys and her own failures,” he says. “For
her it’s about power.” Soi is quick to point
out, though, that with no laws to protect
them strippers are often vulnerable to
abuse and exploitation.
His work also extends to the ‘beachboys’ in many of Kenya’s coastal towns
and their mutually beneficial relationships with older European women. “We
are talking about adults who’ve never
stepped into a class but can speak
French, German, Italian, Portuguese
and Spanish,” he says.
Soi began practising as an artist over
20 years ago. “I made a decision that I am
not going to make beautiful art for you,”
he says. “If you want beautiful art go to
the next people. I will address issues that
affect people locally, issues that people
would rather bury their heads in the sand
about and pretend they do not exist.”
FAT CATS

He also defends his pop art style. “There
are people who believe that for you to be
a good artist, you need to go abstract, you
need to create something so complex
that you need someone to come and
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ART & LIFE

White
Christmas
Soi portrays
the “basic
economics”
that oil the
relationships
between
tourists and
‘beach boys’

As well as his
political canvases
(right), Soi has his
“merchandise” –
cute pop paintings
(above) and the
tote bags loved
by Lupita Nyong’o

explain it to you,” he says. “[The] complexity in the work is in the simplicity.”
His 2009-10 Fat Cat series on greedy
officials stirred the art community but it
was his 2012-13 China Loves Africa series
that saw him gain global attention. The
African Union’s new headquarters in
Addis Ababa – a gift from the China State
Construction Engineering Corporation –
was inaugurated in 2012 and China’s involvement in Africa was a topic of heated
debate.Soi,however,approacheditwitha
cartoonist’s humour. One painting shows
a group of black women peeking into
the underpants of a Chinese man along
a newspaper cutting with the headline:
“How China wins hearts and minds.”
All of the paintings in the 40-piece
series were sold, including four that were
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bought by an amused Chinese collector
who spent 30 minutes laughing at the
artwork in Soi’s studio.
Kenya is not new to foreign migration.
A quick tour through any of the many
shopping malls and uptown restaurants
reflects the diversity of any multicultural
city with blacks, whites, Arabs and Asians, locals, expats and tourists mingling.
But China’s increasing presence began
to change the status quo.
“Towards the end of [former president
Daniel arap] Moi’s rule, China realised
there were a lot of changes taking place
in South America, where they had invested heavily. You can only be in a situation
for a certain period of time before you
start to look for new frontiers to further
your investment needs,” Soi asserts. “At

China
loves
Africa 38
This series
took a
tongue-incheek look
at Africa-Asia
relations
that had
one Chinese
collector
in stitches

that particular time every infrastructure
programme in Africa was either funded
by the World Bank, the IMF or some foreign mission in that particular country.”
He points out that unlike some of the
continent’s Western partners and donors,
when it comes to providing finance the
Chinesemakenodemandsonacountry’s
governance. This makes the proposed
economic partnerships attractive to a
number of African countries.
But Soi thinks the solution to the continent’s development is in the hands of
neither the West nor China: “The problems that we face in Africa right now can
basically be resolved in Africa itself if
people get up one morning and decide
to get their act together.” ●
Billie Adwoa McTernan in Nairobi

95

LIFESTYLE

ALL RIGHTS RESERVED

TRAVEL SURF RESORTS
S

BOBBILE BA PHOTOGRAPHY 2014

96

Breaking the waves
The Tastemakers hit the shores looking
for snappers and swells at some of the
continent’s best surfing spots

S

urfers looking for breaking thrills can have their pick
with surfing schools and resorts popping up coast
to coast, on the Atlantic and Indian Oceans. With a
range of activities and water sports laid on for them, boardlovers will find quality waves and well-equipped beaches
across the continent, not to mention some much needed
after-surfing downtime in little-known locales.

Kwepunha Surf Retreat, Liberia
Head 50km north of the Liberian capital, Monrovia, to
Robertsport, home of the Kwepunha Surf Retreat. Kwepunha
is not just a haven for surfers looking for five-point breaks,
it also promotes community development through job
creation, swim and surf lessons, youth mentorship and
small-business workshops. April through October are
the best times to surf Robertsport. At the retreat also enjoy
yoga brunches, jungle treks, spear-fishing (yes, you read
that right!) and canoe-building. kwepunha.com

N’Gor Island Surf Camp, Senegal
Just a five-minute pirogue boat ride from Dakar is N’Gor
Island, which was popularised by surfing cult classic film
The Endless Summer. It is replete with beautiful beaches,
surfboard shops and quaint restaurants. With its best surfing
happening between November and February what keeps
surfers coming back to N’Gor is the famous N’Gor Rights

break. Stay at N’Gor Island Surf Camp founded by Danish
entrepreneur Jesper Mouritzen, where he and his crew
of local guides offer surf lessons and share how to catch
N’Gor’s best breaks. gosurf.dk/en

Coco Rico Resort, Mozambique
Scuba diving, dolphin watching, snorkelling and surfing
against the picturesque backdrop of the Indian Ocean’s
turquoise waters and white sand beaches? Sign us up!
With endless activities and opportunities to soak up the sun,
Ponta de Ouro is a beach enthusiast’s dream come true.
In fact, stay at Coco Rico Resort and you’ll be signing up
for one of 25 different activities. Ponta de Ouro is a great pick
for groups as it caters to both beginner and expert surfers.
Visit from June through August. cocorico.co.mz

Carpe Diem Resort, Angola
Adventure-seekers needn’t look elsewhere: Cabo Ledo in
Angola is home to some of the longest and least-surfed point
breaks in the world. The most epic waves occur May through
October. Each October, Social Team Angola hosts Social
Surf Weekend – a competition and gathering of surf
aficionados. Unwind in the evening in a bungalow at Carpe
Diem Resort where you can choose to enjoy fresh seafood
either beach-side or poolside. resortcarpediem@gmail.com
Tameshia Rudd-Ridge
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ART & LIFE

BEHIND THE SCENES

TWITTER TRENDS
#MISSINGBUDGET
When Nigeria’s national budget
went missing in January, social
media had plenty to say...
IG: 60sec9janews
@60sec9janews

It’s easier to answer biblical
questions like “Where did Cain get
his wife” than answering questions
in Nigeria politics #missingbudget
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Busi Mhlongo, genius. David Bowie, genius. K. Sello Duiker who
is a fascinating figure and changed my life. Samuel Beckett for saying:
“I don’t want you to tell me who/what Godot was.” Marvin Gaye,
genius. James Baldwin, genius, and so important in shaping who
I’ve become. And, of course, my great-grandfather.

Where are you hanging out?
I don’t hang out much. But when I do, I prefer to go to friends’ houses,
Interview by Kim Garner
coffee shops or bookstores. ●

97

DAY IN THE LIFE
EXTRAORDINARY STORIES OF ORDINARY PEOPLE

ROSE SKELTON

98

TAKING FLIGHT
Entranced by the beauty and mysteries of
birds, Moussa Ka is determined to become
one of Senegal’s first ornithologists

I

started working as a tour guide in Saint-Louis when I
was 30 years old. If you want to work as a guide here,
you have to know a bit about birds because we have
the third-largest bird park in the world. After the first day
of my training, I thought it was impossible to recognise
all of these birds. But I was working at that time as a
volunteer teacher in a primary school and I said, I need
this job to feed myself and my family. So I took this difficulty on as a challenge and said, I must succeed. It became
something like a passion.
I am applying to do a master’s course in ornithology at
the university in Saint-Louis, and I will be one of the first
ornithologists in Senegal. It is the only course in all of
West Africa. European scientists have been to Africa and
done many studies, but there is still more to learn about
African birds, like how and where they live during the
different periods. We have a shortage of quality teachers
and materials in Senegal, and we need to travel to other
parts of the world. Birding is not only theoretical, you
have to see the species for yourself. The book helps you
to distinguish between two very close species, but the
real work is on the ground.
I love everything about birds. I have never seen such
beautiful colours anywhere else, those beaks which curve

down and up, those beautiful songs. In particular, I love
the fact that birds travel a long way from Europe to Senegal
every year with no break. As long as the natural environment remains intact, these birds will keep making this
long journey. Can you imagine a person walking every
year to Senegal and back? Sometimes birds can do things
that people cannot do, and that is wonderful.
There are three different families living in my house.
We are a big traditional Senegalese family. I was married
but we separated in 2002 and my two children live with
me. Sometimes the mothers here cannot take care of the
children, and they do not always go to school. As someone
who went to school, I could not have my children not
having an education and that is why I took them with me.
She and I are not friends, but we are neighbours so she
sees them every day if she wants.
I show my kids and my nieces and nephews the bird
book to try to get them interested. Every time they see a
bird they call me: “Moussa, Moussa, come and see the
bird,” and I tell them what it is, what they eat, and if it is
migratory or not. My friends in the neighbourhood wonder, how can I be interested in birds? They say: “This
guy is somehow crazy.” They think that birds are only
there to be eaten, or else there is no use for them.
There was never a boy in my family who sang for
freedom like I did. I was the first person to say no to my
parents and some in my family do not appreciate that. In
life I value peace. If there is peace, everything works well.
But you have to be free to have peace, free to do what
you want to do, to live your life as you wish. Maybe that’s
why I like birds. Without really knowing it, yes, maybe it
Interview by Rose Skelton
is linked to that. ●
THE AFRICA REPORT

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across 36 countries. Transforming Africa’s
economies with landmark deals. That’s what
we call The Network Advantage. For a corporate
and investment bank that gives you the network
advantage in Cote d’Ivoire, talk to Ecobank.

he Africa CEO Forum, held
in the Ivorian economic capital on
21-22 March, heralds a new chapter
in Africa’s economic integration. The
first official visit by Kenya’s President
Uhuru Kenyatta to Côte d’Ivoire is
an opportunity for African leaders
to move beyond the stale linguistic
confines that are so much a part of
the post-colonial era on the continent.
As President Alassane Outtara of
Côte d’Ivoire told The Africa Report
in 2012, the relationship across the
language divide needs to improve.
“There are lots of obstacles, of
course. But also there was previously no willingness in Côte d’Ivoire
to develop those relationships, no
determination to say: ‘We must build
up our relationship with [Anglophone
Africa], not just for diplomatic but for
economic reasons’. We believe there
is a lot we can do to grow together.
We believe more in external trade
than in received aid. We believe in
foreign investment.”
That determination to work together is now here. The two countries
have similarities. Kenya and Côte
d’Ivoire are regional champions
– renascent Abidjan is regaining its
diplomatic heft in West Africa while
Nairobi is the venue for much of the
dealmaking in the East African Community. Both have growing electricity
networks and strong agricultural and
manufacturing sectors.
Tested by security challenges
and rocked by corruption scandals,
Kenya’s economy recalls the motto

12 ELECTRICITY
Bringing power to the people
13 OIL AND GAS
The waiting game
14 RANKINGS
Top 20 companies and banks

of the city of Paris, fluctuat nec murgitur (‘She is tossed by the waves
but does not sink’). The unsinkable
and ever-optimistic Kenyan business
class has been an exemplar of this
ability to rise to the occasion and
seize new opportunities – the latest
being the discovery of sizeable oil
deposits. They offer a way of balancing the country’s trade deficit,
despite today’s lower oil prices.
The country’s leadership is also
showing the ruthlessness that characterises successful rising economies.
Not impressed by Western threats
of isolation before the 2013 presidential elections, the administration
made overtures to Asian powers, with
President Kenyatta embarking on an
eight-day visit to Russia and China
to discuss energy-sector investment
immediately after his victory. China
is building a new standard-gauge
railway between Mombasa and
Nairobi, with China’s Export-Import
Bank providing 90% of the financing
for the $3.8bn project.
Not satisfied by this balancing of
powers, Kenya has also balanced
Asian powers amongst themselves.
Japanese and Chinese investors are
both keen to win the contract to build
a second terminal at the Mombasa
port. The final price may well turn out
to be advantageous to Kenya as a
result – evidence, if true, that African
governments are finally playing hardball with global investors who want a
slice of the ‘Africa rising’ story. Kenyan
business folk and politicians at the
Africa CEO Forum will no doubt trade
stories and tactics with their Ivorian
colleagues. Watch out, world. ●

A country with
entrepreneurship
to show to the
world, but one
where corruption
weighs heavily

Despite the international headwinds, Kenya’s
economic growth is continuing at a strong pace.
But with the population complaining more
about corruption, the race for the 2017 national
polls could be a hot one
By Ilya Gridneff in Nairobi

STUART PRICE/MEACCT/HANDOUT/MAXPPP

O

ntheonehand,theKenyan
economy in 2016 is thriving and among Africa’s
biggest success stories. It
is growing faster than Nigeria’s or South Africa’s and its government is spending billions of dollars on
new infrastructure. Nairobi also recently
played host to two of the best-known
world leaders: United States President
Barack Obama and Pope Francis, both of
whom heaped praise on the government
for its development progress.
However, a closer look shows that
Kenya is still facing the same problems
that have held it back for decades. A $1bn
scandal relating to a eurobond and involving top politicians caused uproar at
the end of last year. Kenya’s chief justice
Willy Mutunga also recently said the
country has “a bandit economy” run by
cartels that “collect millions every day”.
The debate over Kenya’s future is beginning to take centre stage as an intense political campaign begins ahead
of the country’s next presidential election, which is scheduled for August 2017.
Economic success is likely to be a key
feature of the ruling Jubilee coalition’s
election campaign, which will seek to get
President Uhuru Kenyatta re-elected to
a second four-year term. The global oil
price crash has helped Kenya and other
East African countries to tackle a perennial problem: gaping current-account
deficits. Analysts have projected that
Kenya’s spending on energy imports will
fall to $1.1bn this year, down from an
average of $3.4bn a year between 2011
and 2015, as the price of oil plunges to
its lowest for more than a decade.
As campaigning heats up before the
next election, Kenya’s ruling Jubilee
Alliance will seek to capitalise on
the healthy economy, says Macharia
Munene, a professor at the United States

International University in Nairobi. “The
government really is in a good position
to win the elections.”
Kenyatta’s government is pushing major new infrastructure projects, from the
construction of the Lamu transport corridor to a new railway line to link Nairobi
to Mombasa and Kenya’s landlocked
neighbours. With electricity production
capacity of 1,708MW in 2013, Kenyatta’s
government set an ambitious target of
adding 5,000MW to the national grid by
the end of 2016 – a target that is likely to
be missed even with a steady stream of
renewable energy projects on the agenda.
POPULARITY TACTICS

Economic growth was 5.6% in 2015,
even with low tourist arrival numbers
(see page 8), but there are risks that the
economy could take a wrong turn. In
preparation for the upcoming national
vote, the government could be tempted
to ignore debt sustainability and spend
to increase its popularity. A public sector pay rise is now under discussion.
Ahmed Salim, a risk analyst at Teneo
Intelligence, says: “It’s clear that the
ruling government coalition is firmly
only thinking about the 2017 elections
[…]. It’s just unclear how they will pay
for these marquee infrastructure projects and also pay for public servants.”
The International Monetary Fund,
while generally upbeat, raised concerns
in September 2015 about fiscal performance due to “shortfalls in revenue collections and additional expenditure
pressures.” Still, it is expected to renew
a $750m precautionary loan facility to
Kenya for the next two years, seen by analysts as a critical insurance policy against
any shocks the economy might face.
The debates around the presidential election are likely to revolve around
Kenya’s military intervention in Somalia,

domestic security, the economy and
corruption. Despite a deadly attack on
a base manned by Kenyan soldiers in
Somalia in January, President Kenyatta
says that Nairobi is committed to peace
in Somalia and fighting Islamist radicals
there. “We will continue in Somalia to
fulfil our mission,” Kenyatta told reporters. The opposition has largely avoided
debatingwhetherKenyansoldiersshould
be fighting rebels in Somalia.
Opposition leader Raila Odinga,
who heads the Coalition for Reforms
and Democracy (CORD), is focusing
his attacks on government corruption
scandals. The latest claim is that $1bn
is missing from the sale of government
bonds. “This is grand robbery through
a thread of lies, an elaborate conspiracy
with money laundering experts,” Odinga
told The Africa Report in January without
providing evidence of treasury’s mishandling of public finances.
Odinga, 71, lost the past two consecutive elections, saying they were rigged. The
2017 poll will be decisive for his political
future. And despite a string of scandals
involving low-level government graft
– such as procuring $1,000 wheelbarrows and $85 pens for a National Youth
Service scheme – the opposition has not
been able to land many punches.
CORRUPTION HURDLE

William Ruto. The ICC is trying Ruto,
who faces pressure from within his own
party and the Kalenjin community, for
his role in attacks after the contested
2007 national elections. This looming
court case “continues to cloud” what
appears to be a cohesive government
coalition, but the alliance between Ruto
and Kenyatta, – who faced similar ICC
charges that have now been dropped –
appears solid, says Teneo’s Salim.
Facing internal pressures from his
own coalition, Odinga told journalists in
January that the opposition was united
and will remain together going into the
elections. “Our focus will be on registering supporters to vote […]. A big portion
of the people who were eligible to vote
were denied a vote last time,” he explains.
President Kenyatta spent nearly a
month earlier this year canvassing on the
coast, which is traditionally opposition
territory. He also promoted the country’s
strugglingbillion-dollartourismindustry.
Over the past several years tourism has
suffered after a series of terrorist attacks
by Somalia-based Al-Shabaab Islamist
militants. Foreign governments issued
travel advisories that last year resulted
in a 20% drop in tourist arrivals, a big
blow to the economy.
The country’s security problems have
been linked to unemployed coastal
young people who have become radicalised. Some of them have joined
Somali Islamist rebel group Al-Shabaab,
often after promises of generous salaries to fight in Somalia or the KenyanSomali border region.

OntheirvisitstoKenyalastyear,President
Obama and Pope Francis raised corruption as a major hurdle to the country’s
development. “Every shilling that’s paid
as a bribe could be put into the pocket
of somebody who’s actually doing an honest day’s
In a November poll 62%
work,” Obama told a cheering crowd in Nairobi’s Saof Kenyans said the country
faricom Kasarani Stadium.
is headed in the wrong direction
A poll taken in November
showed that 62% of Kenyans
think the country is headed in the wrong
Aly-Kahn Satchu, chief executive ofdirection. “The key issue of concern for
ficer of Nairobi-based Rich Management,
many Kenyans has shifted from the ecosays that despite the continent’s worries
nomy to corruption. Kenyans are emabout a commodity-driven downturn,
pathetic that public officials mentioned
Kenya is well positioned, with large inin corrupt dealing must either be prosecfrastructure projects and government
uted immediately, step aside forthwith
plans to spend at least $1bn on roads.
or resign,” explained polling company
“Kenya’s GDP [growth] at 6% is going to
Infotrak’s managing director Angela Amlook really high versus a probably zero
bitho about the results of the poll.
per cent in Nigeria and South Africa,” he
argues. “I remain optimistic.”
In the meantime, the relationships
Satchu said that while Kenya’s manbetween Kenya’s three main ethnic
groups – the Kikuyu, Kalenjin and Luo –
ufacturing sector is far behind that in
are being tested by the uncertainty
countries like Ethiopia, there are indicators it can capture business moving out
over the International Criminal Court
of China. “There is good human capital
(ICC) case against deputy president
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KENYA | OUTLOOK

here; tremendous connectivity; you’ve
got geothermal [power]; and then the
route to the sea. You are seeing gains in
pocketslikeexpansionintextiles,” hesays.
Kenya’s exports have been helped by a
tumbling shilling, which fell 14% against
the US dollar last year. The loss of value
against the greenback is also a lot smaller
than that of other major African currencies like South Africa’s rand.

PHILIPPE LISSAC/GODONG

Monetary union would mean
lending scope for Kenyan banks

SHILLING NOT THRILLING

Peter Ng’eno, managing director of Kenya
Unit Trusts at UAP-Old Mutual Group,
says despite clawing back lost ground at
the end of last year, high single-digit inflation is expected to put pressure on the
currency. “The shilling is not out of the
woods yet, as continued infrastructure
and real-estate investments will lead to
increased importation of capital goods
puttingpressureonthecurrency,” hesays.
Kenya’s most ambitious infrastructure project, the Lamu Port Southern
Sudan-Ethiopia Transport Corridor
(LAPSSET), which involves the construction of a port, power plant, railway
and other infrastructure, is estimated to
cost $26bn. The government cancelled
a long-planned investor conference on
LAPSSET in October, indicating a slowdowninactivityaroundthemega-project.
Part of LAPSSET includes an oil
pipeline to pump oil from northern
Kenya. Crude was discovered in Uganda
in 2006 and four years later in Kenya, but
both countries are still far from first oil.
Another sector that has been trumpeted as highly hopeful for the Kenyan
economy is technology. Investor, adviser
and author of Success in Africa, Jonathan
Berman is investing in African tech companies. Even so, references to Kenya’s
‘Silicon Savannah’ make him wary. “It’s
a pitch, and not a very convincing one,
because it suggests a deep ecosystem that
doesn’t exist yet,” he explains. “But there
are opportunities to build companies
that are very useful to large numbers of
people and therefore enjoy rapid growth.”
With the United Nations Children’s
Fund estimating that Kenya’s poverty
rate is 42%, Kenya’s economic performance is not just a subject of political debate. The country’s population is largely
young and the working-age cohort is
predicted to grow from about 18 million people now to 48 million in 2050.
And so, today’s choices will help to determine if there are more marginalised
youths on the coast or tech and service
workers in Kenya’s major urban areas. ●
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7

To the region and beyond
As Kenya is a gateway to East Africa, local
companies stand to benefit from regional integration

I

t has been touted as East Africa’s answer to the European Union. Made
up of Burundi, Kenya, Rwanda, Tanzania and Uganda, the East African
Community (EAC) envisions a regional political union, with free movement of people and a shared currency
by 2024. Combined, the five member
states have a population of about 140
million people and a gross domestic
product totalling more than $100bn.
Kenya’s banks are the most active
lenders in East Africa, and they are
poised to reap more of the rewards
offered by a monetary union than the
financial institutions of other EAC
members. Kenya has 43 commercial
banks, significantly more than any
other country in the bloc, as well as
two mortgage finance institutions.
KCB Group leads the region with assets totalling $5.1bn and branches in
every member state. Another Kenyan
lender, Equity Bank Group, has total
assets worth $3.7bn and is also wellplaced to capture regional markets.
The region’s biggest companies
are Kenyan, and they already hold a
strong foothold across the five EAC
countries. East Africa’s largest consumer goods retailer, Nakumatt, is
expanding aggressively in Uganda
and Tanzania. Kenyan brewer East
African Breweries is also looking to
strengthen its operations in the EAC.
While there is much hope for a
single currency, massive challenges
remain, including the harmonisation

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of monetary and exchange-rate policy
frameworks, which the EAC admits
could take some time. However, the
bloc heralds its greatest achievement
– a tax-free trade zone – as a sign that
bodes well for future harmonisation.
CORRIDOR WIDENS REACH

Infrastructure projects are also a key
component of the EAC. Phyllis Jepkosgei Kandie, cabinet secretary for
labour and the EAC, tells The Africa
Report: “We’ve been having twomonthly summits between Kenya,
Uganda and Rwanda on the Northern
Corridor infrastructure. Very interestingly, our neighbouring countries
are beginning to see the benefits of
this and they’re showing interest in
actually joining that corridor – the
Democratic Republic of Congo being one of those countries. We will
be hearing very soon about new developments in that area. Ethiopia is
an observer in that corridor. South
Sudan is also very interested.”
But the failure to include Ethiopia,
South Sudan and Somalia in the EAC
so far highlights inconsistencies amid
the fanfare of unity. The EAC does
not include a key driver of growth,
and Ethiopia is set to surpass Kenya
as East Africa’s largest economy this
year. Developments in Ethiopia may
get the leaders of the EAC thinking
about broadening their horizons. ●
Ilya Gridneff in Nairobi
and Mark Anderson

We’ve launched initiatives
to attract more tourists
Before moving to a new post in the Ministry
of Labour and East African Community, Kandie
told The Africa Report why she thinks 2016
will see Kenya’s tourism sector bounce back
TAR: How important is tourism
for the Kenyan economy?
PHYLLIS JEPKOSGEI KANDIE:
It’s very important. It contributes
12% to Kenya’s gross domestic
product, so for us it’s huge. It’s a
sector that quickly gains traction,
as we are seeing right now. It employs quite a number of Kenyans
either directly or indirectly – directly 250,000 and indirectly a lot.
And so it’s a very important sector
to our economy and a major focus
for the government.
Tourist arrivals fell dramatically
after two high-profile terrorist
attacks. What is Kenya doing
about it?
We have invested a lot in security. In our last budget, we invested
close to 20% of our national spending on security. That’s how important this is. We also realise that
we need to involve communities
in security matters, and Kenyans
are really coming together to fight
this challenge. Our international
partners are working with us. The
world has come to an understanding that we must rally together.
In Kenya, we’ve realised that
we had to rebrand and we’ve just
launched a new brand campaign
called ‘Make it Kenya’ to tell our
narrative, to tell our story. I think,
oftentimes, other people told our
story and the difference this time
round is that we are confident that
we know what we’re talking about.

ALL RIGHTS RESERVED

8

There are a lot of emerging stories
about East Africa and Kenya that
we need to tell.
When do you expect Kenya’s
tourism sector to recover?
After looking at forward bookings, I think 2016 will be the year
Kenya’s tourism sector recovers. Airlines are coming back.
Lufthansa came back after 18
years. China Southern Airlines is
flying direct from Guangzhou to
Nairobi. Delta is coming in soon.
That tells you that we’re on the
right track. Airlines don’t come in
unless they’ve done their research.
Negative travel advisories affected us hugely, especially in the

We invested close to 20%
of our last budget on security.
That’s how important this is.
initial days following the attacks
when there was a blanket ban
on the country. We tried to make
our case that terrorists are not all
over the country. I think there’s a
general understanding now that
the terrorist threat is area-specific
rather than country-specific, and
that is helping the sector recover.
How many tourists are you expecting to arrive this year?
It’s a bit early to predict, but
we’re hoping that we can at least

recover the 30% that we lost since
the attacks. The Coast region has
been really affected. All along
Mombasa and Malindi it’s a really
rich area in terms of what it holds
for tourism. We’ve launched three
new initiatives to attract more tourists: charters landing in Mombasa
airport will not pay landing fees for
the next two years; the government
will subsidise $30 for each person
the charters bring in; and any child
under 16 will come into Kenya
without paying a visa. These initiatives should really help the sector.
Which countries are your main
competitors for tourists?
We realise that our tourism sector has to compete with everybody else. A lot of destinations
are coming up, providing almost
the same product: the beach, the
safari. We need to differentiate
ourselves. Tanzania, South Africa,
Seychelles, Zimbabwe and other
long-haul destinations are our major competitors. We’ve got to work
a little bit harder and know what
our competitive advantage is and
know how to position ourselves.
Business tourism is booming
because there’s a huge interest in
investment, not only into Kenya
but into Africa in general. We
are positioning Kenya as the
entry point into East and Central Africa, and Kenya Airways is
a huge part of that. ●
Interview by Mark Anderson

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KENYA | OUTLOOK

Investment Connecting future generations
Plans for major investments in railways, electricity and other infrastructure
aim to make Kenya a stronger hub for the East African region

T

he government has put infrastructure development at the top of its
priority list, ringfencing tens of
billions of dollars to upgrade the country’s transportation and energy sectors
through the Kenya Vision 2030 plan.
President Kenyatta is determined to
defend Kenya’s position as the gateway
to East Africa and satisfy the country’s
thirst for electricty. ● Mark Anderson

projected to generate 300MW, which could
cover 15% of Kenya’s current electricity
consumption. Google owns a 12.5% stake
in the project, which is due to become
operational next year.

Kenya’s chronic power shortages
are set to get a boost from this 1,045km
power line that will pump electricity
into Kenya from hydroelectric power
stations in Ethiopia. The line is set
Wajir
to be finished by the middle of 2018.

KENYA
SOMALIA

Eldoret

Dabaab

Kisumu

Lake
Victoria

Nakuru

Olkaria Geothermal Power
Plant Geothermal power is now

Nyeri

Garissa

200 km

Suswa
NAIROBI

Kenya’s number one source of energy
according to KenGen. The 140MW
Olkaria V project is underway and a
280MW extension to the Olkaria complex
came online in December. Kenya
now accounts for 5% of total global
geothermal production.

Lamu
TANZANIA

Malindi

Indian
Ocean

Mombasa

Jomo Kenyatta International
Airport Nairobi’s airport will get

Mombasa-Nairobi Standard
Gauge Railway The country’s

a new terminal and runway through
a $770m investment that will boost
the number of passengers it can handle
every year from seven million to
20 million. Kenya has borrowed about
$425m from the African Development
Bank to fund the upgrade.

most expensive single infrastructure
project since independence will see
Kenya splash out $3.8bn on a railway
between Nairobi and the port of
Mombasa. 90% funded by China’s
Export-Import Bank, it is scheduled
to be finished by the end of 2017.

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Lamu Port Southern SudanEthiopia Transport Corridor
At an estimated $26bn, LAPSSET is
the region’s most ambitious infrastructure
project. It includes a port, roads and
a 1,700km pipeline that will allow South
Sudan to export oil via Kenya’s Lamu port.

9

OUTLOOK | KENYA

is one of a new generation of executives.
She left her job as a librarian in 1997 to
found Keroche Breweries. Since then,
Karanja has taken on regional beer giant
East African Breweries and Keroche
captured a 5% share of Kenya’s beer
market. Karanja puts her firm’s success down to strong sales of Keroche’s
signature Summit beer to low-income
Kenyans. Last year Keroche opened a
$29m expansion project at its brewery,
enabling it to increase its annual production 10-fold to 110m litres.

Some of the biggest
names in Kenya’s
business world are
fighting for their careers,
while others are
just getting started

1

ALL RIGHTS RESERVED

People
to Watch
Nairobi
moneymakers,
old and new

2

BOBBY PALL

O

ne of the toughest jobs in the
Kenyan business world has
to be that of Kenya Airways
chief executive Mbuvi Ngunze (1). The
troubled East African airline reported
Kenya’s largest-ever corporate loss
– $252m – in July of last year. Ngunze
has been running Kenya Airways since
2014 and previously served as chief
operating officer. He predicts that it
will take at least a year and a half to
put the company on a firmer footing.
The carrier, which is partially owned
by the Kenyan government, plans to
shed jobs, sell aircraft and borrow
$200m to improve its books.
Competitors around the continent
are paying close attention to the expansion plans announced by Atul Shah (2),
supermarket chain Nakumatt’s managing director. Nakumatt has been buying up rivals in an aggressive regional
expansion, and the management of
Uchumi – a competitor that has been in
turmoil since the board sacked former
chief executive Jonathan Ciano last
year – will be scrutinising Shah’s every
move. Kenya’s retail giant continues to
push into the East African region, and
Shah says Nakumatt will open new outlets in Tanzania, Uganda and Rwanda in
the first half of this year. The company
currently operates 63 supermarkets.
Shah started his career as a shelf-stacker
in his father’s shop and opened his first
store in Nakuru in 1978.
The past few decades in Kenya have
seen industry outsiders morph into
business leaders. Tabitha Karanja (3)

3

ALL RIGHTS RESERVED

10

START-UP SUCCESS

Kenya’s tech sector continues to be
among the continent’s most vibrant.
Kenyan entrepreneurs took in $47m of
the estimated $186m that African tech
start-ups raised last year, according
to data compiled by Disrupt Africa,
a media outlet. One tech start-up
to watch in Kenya this year is Soko,
which allows customers to buy jewellery and accessories from artisanal
producers. Founded by Catherine
Mahugu, Gwendolyn Floyd and Ella
Peinovich, Soko is an online marketplace for products from more than 1,000
small-scale businesses across the continent. The platform aims to empower
entrepreneurs who would otherwise
be hamstrung by poor infrastructure
and a lack of access and information
relating to global markets.
The Kenyan government has also
taken notice of the potential its tech
sector holds for the wider development of the country. In January, the
government’s Information Communication Technology Authority signed
a memorandum of understanding with
Gilbert Saggia, Oracle Technology
Systems’ Kenya country director, to
improve technical skills as part of the
country’s national plan for development. The government says the project
is an important step towards its vision
for a digital economy.
Some companies have a head start in
the technology field. Michael Macharia
founded SevenSeas Technologies in
1999 and has since turned the company
into one of Kenya’s largest private tech
firms. SevenSeas rolls out information
and communications technology infrastructure services in health, security and
social sectors. It is now in the process of
opening offices in 10 African countries.
The company is planning to issue an
initial public stock offering in 2017. ●
By Idil Abshir in Nairobi

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KENYA | OUTLOOK

11

Telecoms A mobile-money obsession

TREVOR SNAPP/BLOOMBERG VIA GETTY IMAGES

Banks and start-ups want
in on the future of Kenya’s
mobile-money transfers
business, which has
so far been led by the
telecom giant Safaricom

I

n a country as diverse as Kenya,
unifying factors can be limited.
But for nearly a decade, lime green
kiosks have proliferated – from the
farthest-flung corners of the countryside to Nairobi’s teeming slums and
upscale malls.
Laurence Wanjogu is a driver working in Turkana, Kenya’s remote northeastern corner. He drives humanitarian
workers, sometimes a week at a time,
on in the mobile financial space is
through dusty rural villages without
that the tables have turned – now finpetrol stations or grocery stores. “When
ancial service providers are finding
we go to the bush, I don’t want to have
ways to compete and push products
money in cash because it’s not safe
to consumers.”
so I load everything into my M-Pesa,”
Ninety per cent of Kenyan househe says of Kenya’s revolutionary
holds now use mobile money, and it
mobile-money service.
is a huge driver of access to financial
services. Without M-Pesa, financial inM-Pesa’s ubiquitous green stalls
clusion numbers would drop from 70%
house more than 80,000 agents who
to 26%. M-Pesa was revolutionary in its
dispense and receive money through
simplicity but it offered only the most
mobile phones to some 23 million
basic of person-to-person
active customers. Wanjogu also
uses it to buy fuel, to pay his electransfers. Equity Bank is
tricity bill and to send money
challenging Safaricom’s
to his parents when they need
dominance in the init. When his car breaks down,
dustry by moving beyond
person-to-person mobile
he uses M-Pesa to pay for spare
Some
parts in Nairobi, which is 700km
transfers to offer loan and
away, and gets them sent with
investment services, transthe next car driving up. He is also
fers from financial instituof Kenyan
tions to mobile phones and
proud of it: “M-Pesa has solved a
households
lot of problems in this country,”
even international transfers.
use mobile
he says. “And my friend just told
money
me they don’t even have M-Pesa
GAME CHANGER
payment
in America!”
And while Equity might
schemes
It has been almost a decnot yet be competing
SOURCE: BROOKINGS
ade since telecoms provider
with M-Pesa, it is making
Safaricom introduced the service. The
Safaricom squirm. An ex-executive at
mobile-money sector is still changing
Equity Bank who spoke on the conrapidly, and Safaricom is no longer
dition of anonymity argues that the
game is changing: “I think what Equity
the only game in town. In July 2015,
Equity Bank entered the fray and began
has done is put a crack in the door.
offering mobile-phone transfer services
Before there was only one flavour in
through Equitel. Dylan Higgins, the
town, one set of fees […]. Safaricom
co-founder of Kopo Kopo, a mobile
itself has to start to take notice that
technology company based in Nairobi,
there is competition, that you have to
explains: “The beauty of what is going
improve your services.” Equity now

90%

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Equity Bank’s mobile-money
service has attracted 1.3 million
customers since its 2015 launch

has 1.3 million mobile banking customers, and the average number of
transactions has increased from two
per customer per month to 21, according to the bank.
With Equity offering a broader range
of services to customers, Safaricom has
been upping its game. In 2012, Safaricom and Commercial Bank of Africa
launched M-Shwari, a mobile banking
service that allows Kenyans to save and
earn interest through M-Pesa accounts.
One in five Kenyan adults are now active M-Shwari users. Launched in 2013,
Lipa na M-Pesa enables Kenyans to pay
everything from bar tabs to electricity
bills on their phones.
While the Equity-Safaricom battle
grabbed the majority of the headlines
in recent months, the future of mobile
money is not exclusively in the hands
of these major companies. Smaller
firms from Nairobi’s technology scene
are experimenting with more complex
forms of mobile money, some with a
great deal of success.
More than 10,000 merchants use the
services of Nairobi-based Kopo Kopo
to accept mobile payments. In 2014,
the company launched Grow, which
offers loans to small enterprises using
a credit history based on mobile transactions – a sign that the mobile-money
universe continues to expand. ●
By Abigail Higgins in Nairobi

OUTLOOK | KENYA

Electricity Bringing power to the people
Solar power could hold
the answer to Kenya’s
electricity woes, but
officials warn that costs
are still not competitive
on large-scale projects

fering tools to low-income
consumers, who make up
the bulk of Kenyans that do
not have access to power.
SunnyMoney, a solar lantern distributor, provides
accessories made up of a
solar panel, an LED lamp,
a battery and a phone
charger. The units cost
between $10 and $100 and
clients can pay for them in
instalments using mobilemoney platforms. In 2014,
SunnyMoney sold about
660,00 units across five
African countries. Kenya
is one of its core markets,
and SunnyMoney has sold
just under 500,000 units
there since 2013.

T

he race is on to connect Kenyans
to sources of electricity, and
scores of nimble companies
are pedalling individual panels, solar
roofs for companies and micro-grids
for villages, many using new financing
tools. While the price of solar energy
is not as low as hydro or geothermal
power, more Kenyans have the option
of using solar power as an alternative
to the national grid, which has just 2.7
million domestic power connections
MICRO-GRID SOLUTIONS
for a population of about 44 million,
according to Kenya Power, the state-run
SunnyMoney still relies
power distribution company.
on donor funding, says its
The quality of electricity on the
global marketing director
national grid can be poor too. Every
Cindy Kerr. The company
month, Kenyans experience an average
estimates that it would
of more than six power outages, accordneed to sell 500,000 to
Rather than waiting for national grids to catch
ing to estimates from the World Bank.
600,000 units every year
up, communities are opting for micro-grids and
A typical disruption lasts about five
to wean itself off outside
other decentralised energy solutions
hours, bringing business to a standstill
help. “We’re not there yet,
and costing Kenyan firms an average
but we’re close,” says Kerr.
ive than the grid. KenGen managing
of 5.6% in lost sales.
Powerhive, a United States-based
director Albert Mugo says the main
Vimal Shah, the chief executive of
provider of micro-electricity units, is
consumer goods company Bidco Group,
obstacle to investments in utility-scale
targeting larger groups of people. It has
explains his worries: “Energy has always
completed two years of field testing at its
solar power is the cost. “Kenyans need
been a concern […] not only the price of
cheaper power, not expensive power,”
pilot project in Kisii in western Kenya.
energy, but the quality of enhe says. “Even though solar poPowerhive’s technology, which relies
ergy.” After a fall in the price of
tential is [plentiful] in Kenya, we
on solar-powered micro-grids, should
photovoltaic panels, Shah says
enable the firm to “cost-effectively reach
need to get to that point where
he gave up on the grid and
tens of millions of people in rural vilthe price is [cheap] so that we
turned to solar power. “All our
are not supplying Kenyans with
lages unserved by grids while offering
roofs [at our headquarters],
expensive power.”
strong risk-weighted returns to investors,”
within the next two years, will
Powerhive chief executive Christopher
But expensive power is betall be solar roofs,” he says.
Hornor told media in April last year.
ter than no power at all, and
The company raised $20m in January,
companies are reaching out to
of Kenyans
building on an $11m equity investment
RAY OF LIGHT
communities
that
have
few
ophave access
The Kenyan government is
in the company’s flagship project, which
tions for their power supplies.
to electricity,
will serve approximately 90,000 people.
looking to supply more reNairobi-based M-Kopa offers
according
Solar power projects are also being
newable energy to the nacustomers a highly subsidised
to 2012 data
SOURCE: WORLD BANK
launched in tandem with development
tional electricity network.
power system, including solar
initiatives. Counties in the Rift Valley are
panels and a rechargeable radio.
The most ambitious deal it
is pursuing is a $4.4bn investment from
They spend a year paying it off in small,
drilling wells in arid areas that will be
Canada’s SkyPower, which could propowered by solar units, reducing conflict
daily increments using mobile-money
payment systems. The company aims to
and competition over water supplies. ●
duce upwards of 2GW.
But regulators argue that solar power
By Ramah Nyang
reach one million homes in East Africa
is no panacea and is more expensand Abigail Higgins in Nairobi
by 2017. Meanwhile, companies are ofAKE WARGA/CORBIS

12

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KENYA | OUTLOOK

TULLOW

The Ngamia rig site in the South
Lokichar Basin, where Tullow’s oil
discovery made headlines in 2012

Oil and gas The waiting game
Energy companies and commercial banks that are
active in Kenya are positioning themselves to get rich
from oil when times get better

B

ig questions loom over the
external relations for Africa Oil. “Kenya
development of East Africa’s oil
and the upstream companies who have
and gas sector, which has yet to
discovered oil are well placed to lay a
move beyond the exploration phase. The
solid foundation for future production
ambitiousregionalinfrastructureprojects
to take advantage of the inevitable
that are needed to export the oil have
future price rises,” Budden says.
stalled for years, with few signs
Denmark’s Maersk Oil anthat they will get off the ground.
nounced in November that it
To make matters worse, the
would buy half of Africa Oil’s
lowest oil prices for more than
shares in three exploration
a decade are predicted to scare
licences in Kenya and two
Reserves
off investors. Kenya’s reserves
in Ethiopia for up to $845m,
totalling
are also small in comparison to
with the ultimate price dethose found in Uganda. Ireland’s
termined by how much oil
Tullow estimates that there are
is found. Luke Patey, a re600m barrels of recoverable oil
searcher at Oxford Institute
barrels of oil
are thought
in Kenya’s South Lokichar Basin,
for Energy Studies at Oxford
to have been
where it acquired a 50% interest
University, explains: “The
discovered
in five licences in 2010. In the
entry of Maersk Oil and
in Kenyan
Lake Albert Rift Basin in Uganda,
Gas injects new life into the
exploration
where it has been exploring since
Africa Oil project, but the
blocks
2006, Tullow estimates there are
question remains whether
controlled
1.7bn barrels. The Kenyan govthere are enough proven oil
by Tullow Oil
ernment, however, is keen for the
reserves to go ahead in the
SOURCE: DELOITTE
country to play a major role as an
new price environment.”
oil and gas hub for the region.
Africa Oil’s leadership is
optimistic about Kenya and says it will
LAYING FOUNDATIONS
make a final investment decision by
This year will be “a pivotal year” for
2017. Chief executive Keith Hill says
East Africa, and especially Kenya, in
he hopes decisions about regional oil
managing the emerging oil industry at
transportation infrastructure will have
a time of low and uncertain oil prices,
been made by then. East Africa’s most
says Alex Budden, vice-president of
ambitious infrastructure project, the

600m

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Lamu Port Southern Sudan-Ethiopia
Transport Corridor (LAPSSET), includes the construction of a port, power
plant, railway and infrastructure with
an estimated cost of $26bn. But the
project’s high price tag and dependence on oil projects have caused some
analysts to doubt its viability.
There is much to be gained if
LAPSSET comes to life. Should Kenya
and Uganda cooperate on a joint
pipeline both countries may have “a
fighting chance” to see their oil industries come to life by the end of the
decade, Patey argues.
BANKS EYE THE PRIZE

Kenya’s banks have been mulling
investments in regional oil and gas
projects since oil was discovered in
Uganda in 2006. Kenya Commercial
Bank (KCB) says it has invested millions
of dollars in upstream and midstream
activities, though the bank has not
disclosed details about the projects
and companies it finances.
KCB’s chief executive, Joshua Oigara,
tells The Africa Report that his bank
is prepared to put more money into
the oil and gas sector: “The bank’s
corporate financing portfolio has
been a multi-pronged one where we
identify sustainable projects and finance them. We believe that, through
this, we shall be contributing to the
economic well-being of our country as
well as placing it at a strategic point to
attract investors.” He adds: “The same
applies to the oil and gas sector, where
we have been able to finance various
investors with working capital to enable
them to carry out exploration works
as well as invest in other initiatives.”
Aly-Khan Satchu, a Kenya-based analyst, adds that he is optimistic about the
attractiveness of the region’s hydrocarbons sector: “In the long-term, East
African oil and gas is going to play a very
big role, particularly for Asia. From a
geo-strategic point of view, Japan, China
and India are all going to have to take
a position.” He concludes: “I think if I
was sitting in their [KCB’s] shoes, I’d be
looking to pick up positions right now
because in the scheme of things you
are going to get it at a good price.” ●
By Ilya Gridneff
and Idil Abshir in Nairobi

13

OUTLOOK | KENYA

Rankings Kenya’s corporate elite
Noted in the region for their tough dealing and international connections, Kenyan
banks and companies have largely weathered the political storms of recent years

Top 20 banks (in $’000s)
Total assets

1

Kenya Commercial Banking Group

5 315 267

2

Kenya Commercial Bank

4 096 068

3

Equity Bank Group

3 735 157

Net interest
income

Loans

Deposits

Net profits

628 176

3 075 657

4 089 627

349 184

2 697 249

2 150 332

173 344

516 512

2 321 607

2 665 756

185 921
86 883

182 642

4

Co-operative Bank of Kenya

3 093 693

347 810

1 945 632

2 394 098

5

Equity Bank Kenya*

2 713 030

269 829

-

-

-

6

Barclays Bank of Kenya

2 448 149

212 507

1 359 585

1 786 204

90 915
113 128

7

Standard Chartered Bank Kenya

2 411 855

187 537

1 330 602

1 670 086

8

Diamond Trust Bank Kenya

2 293 087

179 608

1 492 175

1 744 759

61 879

9

Commercial Bank of Africa

2 140 507

76 189

1 080 471

1 501 960

36 685

10

CFC Stanbic Bank

1 962 029

91 727

957 686

1 038 893

61 643

11

Investment & Mortgages Bank

1 671 132

98 588

1 101 458

1 075 455

56 743

12

NIC Bank

1 580 261

86 700

1 090 237

1 088 715

44 625

13

National Bank of Kenya

1 334 317

73 684

711 554

1 135 313

9 438

14

Chase Bank Kenya

1 183 279

78 133

620 439

865 616

26 260

15

CitiBank N.A. Kenya

860 672

49 037

260 291

554 465

25 885

16

Bank of Africa – Kenya

674 378

34 623

416 950

451 714

1 561

17

Bank of Baroda Kenya

671 480

39 371

307 735

527 726

26 847
19 618

18

Family Bank

670 285

58 247

411 112

510 959

19

Prime Bank

563 360

28 443

304 700

462 002

20 211

20

Housing Finance Co. of Kenya

539 765

29 083

-

301 917

11 335

SOURCE: JEUNE AFRIQUE RESEARCH

Rank Company

2014 RESULTS IN THOUSANDS OF US DOLLARS; *IN ITALICS 2013 RESULTS

Top 20 companies (in $’000s)
Rank Company

Sector

Turnover

Turnover change
(since 2014 rankings)

Net
profits

1

Total Kenya

Petroleum Services

1 850 665

5.08%

15 437

2

Safaricom

ICT/Telecoms

1 770 867

7.47%

345 485

3

Kenya Airways

Air Transport

1 194 145

-1.10%

(279 054)

4

Kenolkobil

Petroleum Services

989 862

-20.77%

11 830

5

Kenya Power and Lighting

Utilities

678 552

24.33%

69 986
74 347

6

East African Breweries Group

Food and Drink

658 518

-2.11%

7

East African Breweries Kenya

Food and Drink

521 115

NA

-

8

Bamburi Cement

Construction

390 554

1.06%

42 309

9

Masumali Meghji Insurance Brokers

Insurance

344 453

NA

325 657

10

Jubilee Holdings

Insurance

268 637

118.92%

33 644

11

British American Tobacco Kenya

Agribusiness

227 987

2.03%

46 124

12

Kenya Electricity Generating Co.

Utilities

188 874

0.80%

30 637

13

Unga Group

Agribusiness

184 305

6.86%

5 144

14

Jubilee Insurance Kenya

Insurance

173 671

40.74%

18 301

15

Airtel Kenya

ICT/Telecoms

162 532

-6.01%

(75 413)

16

Scangroup*

Media

161 374

NA

9 879

17

Uchumi Supermarket

Retail

155 715

-4.85%

4 166

18

British American Investments Co. Kenya

Financial Services

152 256

51.09%

27 077

19

Athi River Mining - Kenya

Construction

148 976

-7.76%

16 183

20

Nation Media Group

Media

144 728

-4.99%

26 714

2014 RESULTS IN THOUSANDS OF US DOLLARS; *IN ITALICS 2013 RESULTS; NA: NOT AVAILABLE

S U P P L E M E N T TO T H E A F R I C A R E P O R T

•

N ° 78

•

M A R C H 2 016

SOURCE: JEUNE AFRIQUE RESEARCH

14

www.kenyare.co.ke

African Wisdom...

Being happy in life is better than being a king

Global
Strength

Ghanaian Proverb

For more than forty years, Kenya Re has relied on the wisdom of its African roots
to provide the strength that reinsures insurance companies across the globe.
Today, our new future begins with a pledge of our promise to continue growing
our knowledge and our expertise so that we can get even better at making the
world a more secure place. By reinsuring insurance companies across the globe.

10000000
2012

African Guarantee Fund established amongst
the Economic Development Stakeholders.

2014

Supported 1000 SMEs.
24,000 jobs created.

2017 Plan

Support 7,000 SMEs.
Help create 170,000 jobs.

2019 Plan

Support 8,000 SMEs.
Help create 253,000 jobs.

AfricaĘźs growth is our growth.
Africa stands as the worldĘźs fastest growing economy and for us to be part of this
growth, we work with financial institutions across the continent to support
the remarkable efforts of Small and Medium-Sized Enterprises.